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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, 30 March 19
KOEN INVITES BIDS FOR 450,000 TONS OF (SUB) BITUMINOUS COAL FOR H1 AND JUNE 2019
South Korea state-owned utility KOREA SOUTH-EAST POWER CO., LTD. (KOEN) issued a tender for total 450,000 MT of min. 4300, 3500 and 5600 NCV ...
Wednesday, 27 March 19
SHIPPING MARKET INSIGHT - INTERMODAL
Contrary to the December 2018 forecasts but in line with the expectations of the dry bulk market, the first quarter of the year closed negatively. ...
Saturday, 23 March 19
IT WAS A POSITIVE WEEK FOR THE HANDY SIZE MARKET - BALTIC BRIEFING
Capesize
The big ships endured heavy losses last week extinguishing any hopes from the recent minor rally. Negative sentiment gained pace throu ...
Friday, 22 March 19
CHINA MARKET: COAL OUT IN THE COLD - BUSINESS RECORDER
Though China maintains there is no ban, China-bound Australian coal shipments are looking for a new home. For the past few months, coal cargoes are ...
Thursday, 21 March 19
PRICE PLUNGE AS CHINESE LEAVE THERMAL COAL OUT IN THE COLD - AUSTRALIAN FINANCIAL REVIEW
Thermal coal exporter New Hope Corporation says China’s shipment squeeze on Australia is putting downward pressure on prices in all markets i ...
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- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Economic Council, Georgia
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- The Treasury - Australian Government
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- White Energy Company Limited
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Australian Coal Association
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Parliament of New Zealand
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- The University of Queensland
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
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