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Monday, 02 December 19
OPEC PREPS FOR OIL'S 2020 BALANCING ACT - WOOD MACKENZIE
 What steps should OPEC and its non-OPEC partners take to keep the market in balance in 2020? Ahead of OPEC’s meeting in Vienna on 5 and 6 December, I turned to Ann-Louise Hittle, Vice President Macro Oils, for answers.
What does good look like for OPEC in 2020? Given the uncertainty around global supply growth, demand and geopolitics, OPEC will do well to get an outcome like 2019. Brent will average U.S.$64 per barrel in 2019, down on last year’s U.S.$71, but still the second-highest annual price since 2014. It’s a measure of OPEC’s success so far in balancing what is a fundamentally an oversupplied market.
Will demand recover in 2020? We think so. This year has disappointed because of a series of one-off factors and the slowing global economy. The 0.6 million barrels per day (b/d) outcome will be well down on the 1.1 million b/d we forecast back in January 2019.
Sanctions-related demand destruction in Venezuela and Iran, plus warm weather in Europe shouldn’t feature next year. We think annual growth will double in 2020 to 1.4 million b/d. China will be key – we expect growth there to double to 0.6 million b/d, buoyed by strong demand for marine gasoil, as bunker volumes move in response to the new low-sulphur IMO regulations on shipping fuels.
Is global supply still growing rapidly? Yes, we expect an increase of 1.8 million b/d in 2020 –assuming OPEC+ maintains its current production cuts.
What’s changing is the mix, and for the first time in years, the U.S. Lower 48 won’t dominate as much. U.S. is about half the 2020 growth, with the rest coming from other non-OPEC producers including Guyana, Brazil and Norway. The giant Norwegian field, Johan Sverdrup, on stream since October, will add 0.3 million b/d in 2020.
So, U.S. tight oil is still growing? Yes, but at a much slower rate. We expect an increase of 0.5 million b/d, well below the 2018 annual peak of 1.5 million b/d. The rig count is down by 18%, or almost 200 rigs from the November 2018 high, across all tight oil plays. Monthly production growth year-on-year peaked at 1.8 million b/d in August 2018 and could slip to just 0.4 million b/d by end 2020.
Did we anticipate that? We expected 2018 to be the peak year of U.S. tight oil growth – but not the rate of slowdown we’re seeing unfold. Investors are forcing U.S. independents, which account for 80% of tight oil production, to pare back spend on growth and generate cash flow.
What growth there is by end 2020 will come mostly from the Majors (ExxonMobil, Chevron, BP and Shell) whose plans are unaffected by capital constraints.
There’s a certain irony that the free market, through shareholder influence, is succeeding in slowing growth – to OPEC’s advantage.
Time will tell how long it lasts – we think we’ll see tight oil growth recover in 2021 though not back to peak rates.
What about OPEC production? A lot of OPEC oil is off the market – volumes are 2.5 million b/d below a year ago. Around half of that is involuntary, due to U.S. sanctions on Venezuelan and Iranian exports. The other 1.2 million b/d are deliberate cuts by OPEC+. Admirable adherence by key producers in the OPEC+ group has been instrumental in balancing the market and holding Brent above U.S.$60 this year. Without cuts, prices would be much lower.
What does OPEC need to do in December? The current agreement on cuts expires in March 2020. OPEC+ needs to rollover through to the end of 2020. But with global supply growth outpacing demand in 2020, we’ll need further cuts if demand growth disappoints again. OPEC will have to move promptly, in this case, and take out additional production if it wants to support price.
Will fundamentals or geopolitics drive the market in 2020? A bit of both. Tension in the Middle East and U.S. global influence are risks again next year. U.S. foreign policy has been emboldened by the rise of tight oil in 2019, indirectly affecting export sanctions – on Venezuela and Iran – and the attack on the giant Abqaiq facility in Saudi Arabia in September.
None of the geopolitical challenges of 2019 has gone away. But we can see signs already that the U.S. is refocusing on domestic policy in the run-up to the presidential election next November.
Source: Wood Mackenzie
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Sunday, 29 December 19
AUSTRALIA SUFFERS WORST OF CHINA'S COAL CURBS AFTER EARLIER BOOM - BLOOMBERG
Australia is bearing the brunt of China’s year-end coal import restrictions, ceding market share to other exporters including Russia and Mong ...
Saturday, 28 December 19
SUPRAMAX: A 63,000DWT VESSEL, OPEN CIGADING, FIXED A TRIP VIA INDONESIA, REDELIVERY WEST COAST INDIA, AT $8,500 - BALTIC BRIEFING
Capesize
The Capesize market this past week has been attempting to recalibrate itself in consideration of weakening freight levels and increasing ...
Saturday, 28 December 19
CHINESE INDUSTRIAL CITY TO FURTHER CUT COAL CONSUMPTION - XINHUA
Harbin, capital city of Heilongjiang Province in China’s northeastern industrial heartland, is planning to further reduce its coal consumptio ...
Friday, 27 December 19
MISERY LOOMS OVER TOP COAL SHIPPERS AS CHINA TO BUY LESS IN 2020 BLOOMBERG
China isn’t cutting back on consumption of the most-polluting fossil fuel just yet, but it is set to reduce imports.
The world ...
Thursday, 26 December 19
REVIEW OF 2019 AND OUTLOOK FOR 2020 - OPEC
Global economic growth slowed in 2019, impacted by a variety of challenges. Trade issues not only led to reduction in global final consumption but ...
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- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- Independent Power Producers Association of India
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Tata Chemicals Ltd - India
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