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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, 14 February 18
HISTORY REPEATING ITSELF? - IEA
This month’s OMR is abbreviated to allow time for us to complete our annual five-year outlook that will be published in our report Oil 2018 o ...
Wednesday, 14 February 18
SHIPPING MARKET INSIGHT - NASSOS SOULAKIS
The second month of the year is traditionally a particularly interesting one for the shipping industry as a whole and even more importantly for the ...
Monday, 12 February 18
PANAMAX: WITH LIMITED FRESH ENQUIRY IN ALL AREAS, SPOT MARKET RATES DRIFTED LOWER THROUGHOUT THE WEEK - BALTIC BRIEFING
Capesize
A switch to the Atlantic with rates firming as charterers seemed keen to fix and tonnage was tight, prompting a recovery in rates. Trans ...
Monday, 12 February 18
WORLDWIDE: 'DEMURRAGE CLAIMS' FOR THE PURPOSES OF DOCUMENTARY TIME BARS
KNOWLEDGE TO ELEVATE
On 2 February 2018 the Commercial Court allowed an appeal from a decision of the Arbitration Tribunal in Lukoil Asia Paci ...
Saturday, 10 February 18
COAL INDIA ON PATH OF SUSTAINABLE PRODUCTION GROWTH AND SUPPLY TO POWER AND NON POWER SECTOR - PIB
Supply of 371.8 MT of Coal to Power Sector and 103.1 MT Coal to Non-Power Sector Achieved in 2017-18 Till January,2018 Average Rake Loading To The ...
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Showing 1806 to 1810 news of total 6871 |
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- Attock Cement Pakistan Limited
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Billiton Holdings Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
- PowerSource Philippines DevCo
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Kohat Cement Company Ltd. - Pakistan
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
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