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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, 24 July 18
TANKER MARKET : IN TERMS OF TRADE, THE STEPS THAT WERE SLOWLY BEING TAKEN BY OPEC AND RUSSIA - GEORGE LAZARIDIS
Despite the fact that the tanker market still seems to be in the midst of a perfect storm, there are still strong indicators that better sailing da ...
Thursday, 19 July 18
VINACOMIN PRODUCES OVER 20 MLN TONNES OF RAW COAL FROM YEAR'S START - VNA
The Vietnam National Coal and Mineral Industries Group (Vinacomin) has produced over 20 million tonnes of raw coal and 19.3 million of clean coal f ...
Wednesday, 18 July 18
INDONESIA TO AUCTION 16 MINING SITES - JP
Indonesia will soon auction 16 mining sites as no proposal submissions have been submitted by state-owned enterprises (BUMN) and regional administr ...
Wednesday, 18 July 18
SHIPPING MARKET INSIGHT - VASILIS MOIRIS
The new regulations for Chinese flag restricting import of Tier I ships have dominated market sentiment during the past days as buyers have been tr ...
Thursday, 12 July 18
SUPRAMAX: INDO/CHINA COAL RV IS BEING FIXED AROUND USD 10500 BSS SINGAPORE - FEARNLEYS
Capesize
Cape market continue to be extremely volatile says Fearnleys in its latst weekly report.
The further noted that, last week ended wi ...
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- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Australian Coal Association
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- White Energy Company Limited
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Price Waterhouse Coopers - Russia
- The University of Queensland
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
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