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Saturday, 22 June 19
OPEC'S BATTLE FOR CONTROL OF THE OIL MARKET - WOOD MACKENZIE
 Oil supply is confounding expectations. We have just raised our forecasts for non-OPEC production, the latest in a series of incremental increases. Cumulatively, we’ve increased volumes for 2025 by an astonishing 9 million b/d compared with our forecasts in 2016, the oil price nadir. Non-OPEC supply has already bounced from the 2016 low of 54 million b/d and will touch 60 million b/d this year. Our latest Macro Oils Long Term Outlook expects a peak of 66 million b/d in 2025, 5% above our forecast last year. Oil demand too has grown more quickly than expected, up 6 million b/d on 2016 forecasts.
“Did we, like many others, underestimate the industry’s ability to adapt and innovate in the face of financial adversity – and keep on producing oil? Maybe.”
Simon Flowers
Chairman and Chief Analyst
Production keeps on growing despite structurally lower oil prices and upstream investment still 40% below peak. Did we, like many others, underestimate the industry’s ability to adapt and innovate in the face of financial adversity – and keep on producing oil? Maybe. But where on earth is it all coming from? There are four main buckets.
1. US Lower 48
tight oil and NGLs together contribute 4.3 million b/d, half of the increase versus 2016. This primarily reflects the emergence of the Permian basin as the dominant tight oil play. The delineation of sweet spots, more efficient drilling, and the present shift to industrialised exploitation have led to a significant improvement in Permian well economics. Innovation has boosted expected recovery from the more mature Bakken, Eagle Ford and Scoop-Stack plays to a lesser extent. NGLs associated with the gassier parts of the Permian and shale gas plays make up about one-third of the US L48 increase.
2. Russia
Our forecasts for 2025 are 1.4 million b/d higher than three years ago, in spite of sanctions which restrict inward investment and the transfer of the latest technological advances. Rouble weakness has buoyed upstream margins in Russia since the price fell, supporting higher investment, including an intense drilling programme in deeper, low-permeability plays in West Siberia. Sanction of some greenfield projects has been deferred by Russia’s involvement in OPEC+, effectively pushing new volumes out by a few years.
3. Guyana
Only the original Liza discovery was in our 2016 forecasts. We’ve added another 0.5 million b/d by 2025, reflecting multiple subsequent deepwater discoveries. First production is due in 2020, setting Guyana on track to enter the top 12 non-OPEC producers with over 1 million b/d by the end of the decade.
4. Mature producers
Together, these have added over 2 million b/d compared with our 2016 forecasts. Colombia, UK, Norway, US (Alaska) and Canada are among a plethora of countries which have surprised on the upside. Cost cutting, efficiencies, reduced maintenance outages, high-grading and streamlining of new projects, new discoveries tied into existing infrastructure and, in some cases, reduced tax rates have combined to slow decline rates and boost production. There are valid questions whether production from ultra-mature basins is sustainable at these rates, or volumes are merely being accelerated. As a result , some of these producers are slated to see steeper declines.
Non-OPEC supply won’t grow at this rate forever
In fact, Non-OPEC supply stops after 2025 as tight oil plateaus, with decline setting in by 2030. In the meantime, the OPEC+ strategy to boost revenues by constraining production and buoying up price has helped its competitors boost production and gain market share.
We estimate non-OPEC production will swallow up 4.3 million b/d, or 76%, of contestable demand over the next five years. OPEC’s scope to increase volumes through this period is limited to just 1.3 million b/d. The maths sits at odds with Abu Dhabi, Kuwait and Iraq which are investing heavily in new capacity. Some producers in OPEC do see flat or declining volumes in this period.
Major supply outages are helping OPEC+ to balance the market today. Disruptions are set to leap to a record 5 million b/d later this year, including 2.5 million b/d from Iran (sanctions) and Venezuela (economic meltdown and US sanctions). It may suit the rest of OPEC, as well as the US, if exports from Iran and Venezuela are kept off the market for some years – at least until non-OPEC production growth shows signs of abating.
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Tuesday, 17 September 19
THE DRY BULK FREIGHT MARKET IS ALREADY ON A DOWNWARD CORRECTION - ALLIED
Here we are again, just a breath before the final quarter of the year. Under typical circumstances and on the basis of what we have seen during the ...
Monday, 16 September 19
COLOMBIAN COAL PRODUCTION TO FALL 5% THIS YEAR, MINING GROUP SAYS - REUTERS
Colombia’s coal production will decline to around 80 million tonnes in 2019, nearly 5% below last year’s, because of low prices and dro ...
Monday, 16 September 19
THE COAL-D SHOULDER? - BALTIC EXCHANGE
Good fortune and the number 13 don’t usually go hand in hand, but when it comes to coal, 2013 actually seems to have been the commodity&rsquo ...
Monday, 16 September 19
SCRUBBERS AND FUEL PROFIT SHARE CLAUSES - CLYDE&CO
From 1 January 2020, Regulation 14 of MARPOL Annex VI provides that the sulphur content in fuel oil used on board ships shall be reduced from a max ...
Monday, 16 September 19
KOREA SOUTH-EAST POWER INVITES BIDS FOR MAX 1,290,000 METRIC TONS OF STEAMING COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd has issued an international tender for total 1,290,000 Metric Tons steam coal.
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- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Cement Manufacturers Association - India
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Economic Council, Georgia
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Australian Coal Association
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
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