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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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Wednesday, 13 February 19
SHIPPING MARKET INSIGHT - INTERMODAL
If there is one word that can describe the current shipping environment then that this word is most probably “volatility.” The sentimen ...
Saturday, 09 February 19
SUPRAMAX: A 63,000-TONNER WAS REPORTED FIXED DELIVERY FOR AN EAST KALIMANTAN TRIP, REDELIVERY WEST COAST INDIA, AT $9,250 - THE BALTIC BRIEFING
Cape
The Vale disaster weighed heavily on the market for big ships, with uncertainty about shipments/future exports leading to a sharp drop in ...
Friday, 08 February 19
LOWER-QUALITY INDONESIA EXPORTS ROSE 39 MT IN 2018 YOY PRIMARILY IN RESPONSE TO INCREASED DEMAND FROM CHINA AND INDIA - PEABODY
"Underlying seaborne met and thermal coal conditions remain quite positive and the pace of U.S. coal-fueled power plant retirements is expecte ...
Thursday, 07 February 19
QATAR CAN GAIN FROM DECLINING COAL - THE PENINSULA
With North America and Europe closing down their old coal and nuclear plants, major gas exporters like Qatar can and should gain market share. With ...
Wednesday, 06 February 19
FEBRUARY 2019 INDONESIA'S COAL REFERENCE PRICE FELL 8.83 PERCENT YOY
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
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- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Posco Energy - South Korea
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Planning Commission, India
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Minerals Council of Australia
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
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