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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, 13 February 24
WHAT IS THE OUTLOOK FOR THE NATURAL GAS SPOT PRICE IN 2024 AND 2025? EIA
We expect the U.S. benchmark Henry Hub natural gas spot price to average higher in 2024 and 2025 than in 2023, but to remain lower than $3.00 per m ...
Monday, 12 February 24
US THERMAL COAL EXPORTS HIT 5-YEAR HIGHS AND TOP $5 BLN IN 2023 - REUTERS
United States exporters of thermal coal earned more than $5 billion in 2023 as they shipped out more than 32.5 million metric tons of the high-poll ...
Tuesday, 06 February 24
NEW E-FUELS PROJECT TO MAKE INTERNATIONAL SHIPPING CLIMATE-NEUTRAL - RINA
Transport and trade on the ocean blue must be made much greener. This is the goal of the new €17 million European GAMMA project, where compani ...
Tuesday, 06 February 24
INDIA SEES ANNUAL COAL OUTPUT UP 10.9% IN 2024/25 - REUTERS
India expects domestic coal output to increase by 10.9% to 1.13 billion metric tons in the fiscal year ending March 2025, a senior government offic ...
Tuesday, 06 February 24
INDIA'S COAL PRODUCTION INCREASES BY 10.3% TO 99.73 MILLION TONNE IN JANUARY - PTI
The country’s coal output rose 10.3 per cent to 99.73 Million Tonne (MT) in January, over the same month in the previous fiscal.
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- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Vizag Seaport Private Limited - India
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- Global Green Power PLC Corporation, Philippines
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Planning Commission, India
- Heidelberg Cement - Germany
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- London Commodity Brokers - England
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
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