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Saturday, 10 February 18
OIL PRICE USD 100/BARREL BY END OF 2018! - SAROJ MOHAPATRA
.jpg) All demand supplies calculations are going wrong in oil market at present. US production is increasing at a good pace and set to topple Saudi comfortably as the world’s largest crude producer and to break its previous record of 10.7 Million bpd very soon, registered way back in 1970. Still the investment banks are moderating their previous estimates northwards. Recently JP Morgan estimated 2018 average oil price at USD 70 per barrel, which is approx. 50% higher than its estimates published just six months before. Goldman Sachs went one step ahead by forecasting the 2018 price at USD 80. These estimates are happening against the backdrop of known news of increased oil production from Kazakhstan and Nigeria offshore and ramp up in Libya and may be Venezuela in 2018. Also nobody expects that the winter across globe will be as cruel as in 2017.
In last article it was discussed that US, Russia, Saudi Arab have a good say in affecting the trend of oil price. They together produce appox 30 million bpd of oil against total world’s production of 80 million bpd i.e aprox 40%. Until 6-10 years before Saudi Arab was playing a pivot role in balancing the oil price as a swing producer.
As a swing supplier Saudi Arab was very much successful in limiting the price rise of crude upto good extent despite higher demand from both developed and developing economies. Now from demand side there seem to be no significant boost because of no extraordinary economic growth in China and India. Already the demands in developed countries like EU, Japan, South Korea etc except US are almost stagnant.
Now let us come to our subject line how higher oil price is the new reality in 2018. We are forgetting about a huge event that was missed in 2017 and set to happen in late 2018. It’s the world’s largest ever IPO of Saudi Aramco. For 5% disinvestment, Saudi Govt expects to earn more than USD 100 billion. Apart from income through IPO, the most important thing is the valuation of Saudia Aramco as a whole which will be calculated after IPO. US has also good existing interests in Saudi Aramco. Even investment bankers will earn directly as a stakeholder of IPO. Indirectly there is a golden opportunity to earn billions through derivative market of oil. As per recent report, hedge funds have increased their bullish position in oil, despite the fact that oil has reached the highest level of 2014. Net long positions have been raised across WTI, Brent, NYMEX, ICE, US gasoline etc. Now the ratio of hedge long position to short position has reached 11.5 against the same ratio of 1.5 in June 2017 i.e just few months back. It shows how bullish the market is but may be in hibernation show J . Last year it seems the said IPO was delayed just because the oil price was low (relative to expectation of Saudi Arab), though other reasons of no-decision of IPO subscription market place whther Newyork or london exchange were cited.
It is indeed a last opportunity in front of Saudi arab to earn billions just by selling a small stake in company. This is at a time when big economies like UK, France China have decided to go away from liquid fuel in transportation and industrial sector except petrochemicals (where refined products will be used as feed) by 2030-35. In 2008 when oil touched its peak, Saudi arab produced around 8.5 Million bpd. Lets imagine in case now Saudi Arab lowers its production to 8.5 mbpd or even lower, USD 100 per barerl is simply just a cakewalk for Oil.
Saudi Arab’s dynamic, modern-age and powerful crown prince Muhammad Bin Salman estimates the value of Saudi Aramco more than USD 2 Trillion, which is even more than GDP of almost all countries except 5 or 6. Saudi Arab may also try to disinvest more than 5% as an last attempt to have higher earnings. For that Oil need to be shown off to the outside world very bullish.
Therefore it may be concluded that Saudi Arab is in the process of cutting its oil production in a larger volume (against the official published figures) or will cut aggressively in future as against present rate just to ensure oil price is at higher side by the expected timeline of IPO i.e. Oct 2018. It also may have taken the investment bankers into confidence to ensure high over subscription of world’s largest ever IPO possible. The volume of long positions of hedge funds and money managers are probably just indication.
Just tried to put forward the thought on an idle weekend :) along with logic. Lets See what actually happens finally by dawn of 2019 :).
Saroj Mohapatra
DGM - Marketing and Contracts at H-Energy Group Of Companies
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Tuesday, 27 February 18
SHELL SEES POTENTIAL LNG SUPPLY SHORTAGE AS GLOBAL DEMAND SURGES
Media Release: The global liquefied natural gas (LNG) market has continued to defy expectations of many market observers, with demand growing by 29 ...
Saturday, 24 February 18
CHINA BECOMES WORLD'S SECOND LARGEST LNG IMPORTER, BEHIND JAPAN - EIA
China surpassed South Korea to become the world’s second-largest importer of liquefied natural gas (LNG) in 2017, according to data from IHS ...
Friday, 23 February 18
ESTIMATED U.S. WEEKLY COAL PRODUCTION UP 2.8 PER CENT W/E 17 FEB' 18 - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 15.6 million short tons ...
Thursday, 22 February 18
WHY THE COMMODITY RALLY WILL GET BACK ON TRACK - SIMON FLOWERS
Implications for the US dollar and producers
Are we in the early stages of a sustained rise in commodity prices? And what does it mean for the ...
Thursday, 22 February 18
PANAMAX: IT HAS BEEN A SLOW AND UNEVENTFUL WEEK - FEARNLEYS
Supramax
Slight improvement from Atlantic with more hope for upcoming weeks. More grain cargoes from Black Sea made fhaul rates better again $17- ...
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Showing 1796 to 1800 news of total 6871 |
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- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
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- Coalindo Energy - Indonesia
- Economic Council, Georgia
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- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Aditya Birla Group - India
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- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
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- Indika Energy - Indonesia
- Thai Mozambique Logistica
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- The University of Queensland
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- PTC India Limited - India
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Asmin Koalindo Tuhup - Indonesia
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
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