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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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Tuesday, 02 October 18
PANAMAX: A FURTHER RISE ACROSS ALL MAIN ROUTES THIS WEEK - ALLIED
Capesize
Finally an upward recovery was in sight in the spot market the past few days, after the prolonged negative pressure noted the weeks pr ...
Tuesday, 02 October 18
THE PRICE OF OIL CONTINUES ITS CLIMB AMIDST A SERIES OF CONCERNS REGARDING SUPPLY CONSTRAINTS - GEORGE LAZARIDIS
It has been a busy week for oil traders as the price of oil continues its climb amidst a series of concerns regarding supply constraints.
...
Tuesday, 02 October 18
INDONESIA GETS READY TO MEET INCREASED COAL DEMAND FROM CHINA, FREIGHT TO RESPOND - MIKAL BOE
Indonesian coal suppliers have increased their domestic coal production target by 4.5 percent from a previous 485 million tonnes to a massive 507 m ...
Monday, 01 October 18
SUPRAMAX: A 56,000 DWT FIXED DELIVERY FOR A SURABAYA TRIP WITH REDELIVERY TO WEST COAST INDIA AT $13,500 - THE BALTIC BRIEFING
Capesize
A stop-start market for the big ships with many expectations and few fulfilled. Holidays curtailed trading early in the week, but the ...
Monday, 01 October 18
A NO-DEAL BREXIT WILL UNDOUBTEDLY HAVE CONSEQUENCES FOR IMPORTERS AND EXPORTERS - KATE JONES, THE BALTIC BRIEFING
If you live in the UK, you might be finding it difficult to get away from the Brexit debate. “Hard Brexit”, “soft Brexit”, ...
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- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Marubeni Corporation - India
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- The University of Queensland
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Altura Mining Limited, Indonesia
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