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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, 31 January 18
SHIPPING MARKET INSIGHT - TIMOS PAPADIMITRIOU
Days before the celebrations of the Lunar New Year, the dry bulk market seems to be holding well, against negative predictions. Period numbers repo ...
Monday, 29 January 18
BALTIC INDEX GAINS ON STRONGER BIG VESSEL ACTIVITY
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose this past week and ending on a positive note week ov ...
Monday, 29 January 18
U.S.WEEKLY COAL OUTPUT UP 8.7% W/W - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 14.6 million short tons ...
Wednesday, 24 January 18
SHIPPING MARKET INSIGHT - GEORGE ILIOPOULOS
Since the beginning of the New Year we have been witnessing the BDI correcting downwards, which nonetheless seems to have no effect at ...
Tuesday, 23 January 18
OIL MARKET ANALYSIS - ALLIED
Brent oil futures hit a three year high on January 16th touching around USD 70.30 before falling back down to around USD 68.60 at the Time of this ...
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Showing 1821 to 1825 news of total 6871 |
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- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Wood Mackenzie - Singapore
- The University of Queensland
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- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
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- Carbofer General Trading SA - India
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- Xindia Steels Limited - India
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
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- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Samtan Co., Ltd - South Korea
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- CNBM International Corporation - China
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Standard Chartered Bank - UAE
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
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