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