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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, 11 June 18
AUSTRALIAN COAL PRICES HIT 6-YEAR HIGH AS ASIA DEMAND SPIKES - REUTERS
Australian thermal coal prices have risen to their highest level since 2012 as hot weather across North Asia spurs buying ahead of the peak summer ...
Monday, 11 June 18
ANALYSING A NEW AGE OF AUTONOMOUS VESSELS - IMO
The International Maritime Organization answers the questions of Government Europa on how the next generation of autonomous vessels can be regulate ...
Friday, 08 June 18
AUSTRALIAN THERMAL COAL PRICES SURGE AS ASIA DEMAND HEATS UP - REUTERS
Australian thermal coal prices have hit their highest level since late 2016 as the market heats up on strong demand across North Asia and China in ...
Wednesday, 06 June 18
SHIPPING MARKET INSIGHT - KATERINA RESTIS
As observed last month the price of oil hit its highest level since November 2014 reaching $80 per barrel. Global oil demand growth for 2018 was sl ...
Tuesday, 05 June 18
SOUTH KOREA'S SULPHUR CAP ALTERS ASIAN COAL MARKET DYNAMICS: RUSSELL
South Korea’s imposition of a strict sulphur cap on its imported coal is likely to cause ripples across Asia’s markets for the pollutin ...
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- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Coal and Oil Company - UAE
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- White Energy Company Limited
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Planning Commission, India
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
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