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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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- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Eastern Energy - Thailand
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Australian Coal Association
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- PTC India Limited - India
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- Posco Energy - South Korea
- GVK Power & Infra Limited - India
- The University of Queensland
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
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