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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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Wednesday, 21 February 18
SHIPPING MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
2017 proved to be a relatively good year with positive margins for the Dry Bulk market. Especially during the last quarter of the year everyone can ...
Tuesday, 20 February 18
INDIA: COAL IMPORT RISES BY 12 PER CENT TO 18 MILLION TONNES IN JANUARY - PTI
The country’s coal import increased by 12.4 per cent to 18.49 million tonnes (MT) in January, against 16.
44 MT in the same month of the ...
Monday, 19 February 18
JOINT INSURANCE - WHY SHOULD YOU CARE? - SKULD
KNOWLEDGE TO ELEVATE
It is neither controversial nor new to say that co-assureds under a joint insurance policy cannot claim against each othe ...
Friday, 16 February 18
U.S. WEEKLY COAL OUTPUT DOWN 4.5 PER CENT WEEK OVER WEEK, EIA DATA SHOWS
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 15.2 million short tons ...
Thursday, 15 February 18
INDIA: THERMAL POWER PLANTS UNDER STRESS ON RISING COAL, FREIGHT COSTS - BUSINESS STANDARD
Coal-based power plants are feeling the heat of spike in thermal grade coal prices and railway freight costs.
Prices of thermal grade coal sin ...
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- The Treasury - Australian Government
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Planning Commission, India
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Central Electricity Authority - India
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Minerals Council of Australia
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- MS Steel International - UAE
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
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