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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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Friday, 02 February 24
DRY BULK MARKET: THE DOWNWARD REVISION IN THE GROWTH OF CAPESIZE TONNE DAYS IN JANUARY WITH THE BCI DROPPING - MARIA BERTZELETOU
In the last week of January, the dry freight market sustained weakness in the Capesize segment, while the number of ballasters in the Southeast (SE ...
Friday, 02 February 24
COAL INDIA ACHIEVES NEARLY 80% OF ITS FY24 PRODUCTION TARGET IN TEN MONTHS - CNBCTV18
For the month of January, the company’s production grew by 9.1% from the same period last year to 78.4 Million Tonnes (MT), from 71.9 MT last ...
Thursday, 01 February 24
CHINA'S WIND, SOLAR CAPACITY TO OVERTAKE COAL IN 2024 - INDUSTRY BODY, REUTERS REPORTED
China’s installed wind and solar capacity is expected to overtake coal for the first time this year, according to industry forecasts.
&nb ...
Thursday, 01 February 24
ANTI-DEDUCTION CLAUSES: CAN A CHARTERER WITHHOLD HIRE WITHOUT AN OWNER'S CONSENT? - SKULD
KNOWLEDGE TO ELEVATE
Summary
In The Anna Dorothea, the Court found that where a charterparty provides that no deduction from hire may be m ...
Thursday, 01 February 24
INDIA REBUILDS COAL STOCKS TO ENSURE ELECTRIC RELIABILITY - REUTERS
India’s electricity supply is much more comfortable at the start of 2024 than in either 2023 or 2022 as coal production has ramped up and the ...
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- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- The University of Queensland
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- MS Steel International - UAE
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bayan Resources Tbk. - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- ASAPP Information Group - India
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
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