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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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Monday, 29 October 18
SUPRAMAX: THE ASIAN AREA SAW FALLING RATES, WITH A 61,000DWT FIXING DELIVERY KOHSICHANG TRIP VIA INDONESIA, REDELIVERY INDIA, AT $10,500 - BALTIC BRIEFING
Capesize
A market of two halves for most of the week with rates in the Atlantic firming and easing in the East for most of the week, but then, ...
Friday, 26 October 18
SHIP OPERATING COSTS EXPECTED TO RISE IN 2018 AND 2019 - MOORE STEPHENS
Total vessel operating costs in the shipping industry are expected to rise by 2.7% in 2018 and by 3.1% in 2019, according to our latest survey.
...
Friday, 26 October 18
SEVERAL CONTRACTIONS IN GLOBAL STEEL PRODUCTION - JEFFREY LANDSBERG
World Steel Association data released today shows that global crude steel production totaled approximately 151.7 million tons in September. T ...
Thursday, 25 October 18
WHAT DOES THE "IMO 2020" REGULATION REALLY SAY? A QUICK GUIDE - BIMCO
KNOWLEDGE TO ELEVATE
The shipping industry has all eyes firmly fixed on the topic, but what exactly do the “IMO 2020” global sulph ...
Wednesday, 24 October 18
MARKET INSIGHT - NASSOS SOULAKIS
Looking at 2018 SnP activity, it is evident that Greek, Chinese and North European (German and Norwegian) owners are the top buying nationalities, ...
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- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Singapore Mercantile Exchange
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Trasteel International SA, Italy
- Miang Besar Coal Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- PTC India Limited - India
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
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