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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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Thursday, 24 May 18
SUPRAS FIXING AROUND USD 15000 FOR INDO TO CHINA COAL TRIPS - FEARNLEYS
Capesize
Both the physical and the paper market have dropped sharply the last couple of days on the back of a lack of fresh cargoes and a growing ...
Thursday, 24 May 18
FITCH: FALLING COAL INVESTMENT TO SUPPORT ASIAN PRICES
Press Release: The long-term outlook for the Asian thermal coal prices is improving, amid rising regional demand and falling mining investment, whi ...
Thursday, 24 May 18
BEIJING ORDERS UTILITIES, MINERS TO HELP COOL RED-HOT COAL MARKET: SOURCES - REUTERS
China’s state planner ordered utilities this week to stop stockpiling thermal coal and told miners to slash prices, two sources familiar with ...
Wednesday, 23 May 18
TANKER MARKET INSIGHT - TIMOS PAPADIMITRIOU
In the last six months we have seen more than 110 reported tanker transactions involving tonnage larger than 32k dwt and younger than 18 years old. ...
Friday, 18 May 18
AFTER COAL, INDONESIAN GOVERNMENT PUSHES DMO ON GAS FOR ELECTRICITY
After introducing its domestic market obligation (DMO) policy for coal on March 12, the government is going forward with its plan to introduce a DM ...
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- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Altura Mining Limited, Indonesia
- Bukit Makmur.PT - Indonesia
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- The University of Queensland
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Electricity Generating Authority of Thailand
- Xindia Steels Limited - India
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Indian Oil Corporation Limited
- Marubeni Corporation - India
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