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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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Sunday, 18 November 18
COAL STOCKS IN A THIRD OF NTPC PLANTS CLOSE TO NIL - FINANCIAL EXPRESS
Coal supply shortage continues to haunt NTPC, the country’s largest power generator, with latest government data showing 31% of the company&r ...
Thursday, 15 November 18
OIL MARKET REPORT: HEEDING THE WARNINGS - IEA
In last month’s Report, we noted that since the middle of the year oil supply had increased sharply, with gains in the Middle East, Russia an ...
Wednesday, 14 November 18
BIMCO ADOPTS 2020 BUNKER CLAUSES
BIMCO has developed two 2020 bunker clauses that deal with general compliance and the transitional period for an early December release.
...
Wednesday, 14 November 18
SHIPPING MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
The shipping industry is going through an interesting period across all markets. Since the end of last year, the Dry Baltic Index has been showing ...
Tuesday, 13 November 18
INDIA: POWER DEMAND UP; COAL STOCKS AT MINES AT A 5-YEAR LOW - FINANCIAL EXPRESS
Stocks at Coal India mines plunged to a five-year low of 21 million tonne (mt) in October, as a sudden surge in demand for the fuel from the power ...
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- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Timah Investasi Mineral - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- ASAPP Information Group - India
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- Madhucon Powers Ltd - India
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
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