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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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Saturday, 15 June 19
SUPRAMAX: A 58,000-TONNER, OPEN QINGDAO, WAS BOOKED TO REDELIVER IN EAST COAST INDIA AT $6,500 - BALTIC BRIEFING
Capesize
The market closed on a quiet Friday last week after a few hectic days of mid-week trading. Trade routes from Brazil to the Far East we ...
Friday, 14 June 19
PANAMAX: OUTLOOK IS MIXED - FERNLEYS
Capesize
Sentiment changed to a more nervous tone as pacific cargo volumes failed to deliver as expected, however latest activity indicates res ...
Friday, 14 June 19
ELECTRONIC (PAPERLESS) TRADING - SKULD
KNOWLEDGE TO ELEVATE
Electronic Shipping Solutions: Bolero International Ltd, E-Title Authority Pte Ltd, Global Share S.A. (edoxOnline platfor ...
Wednesday, 12 June 19
KOSPO INVITES BIDS FOR 140,000 MT OF 4,600 NCV COAL FOR SEP. 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 140,000 MT of minimum 4,600 kcal/kg NCV coal ...
Wednesday, 12 June 19
IMO 2020 - COUNTDOWN TO 1 JANUARY 2020 -HOW WILL THE CHANGES AFFECT REFINING AND SHIPPING? - WOOD MACKENZIE
We know that the IMO’s regulations represent the biggest step change the shipping industry has ever seen and the implications will be felt th ...
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- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Marubeni Corporation - India
- London Commodity Brokers - England
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Petrochimia International Co. Ltd.- Taiwan
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Interocean Group of Companies - India
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- MS Steel International - UAE
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- The University of Queensland
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
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