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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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Monday, 25 November 19
COAL SUPPLY BY CIL TO POWER SECTOR DROPS OVER 8 PC TO 253 MT IN APRIL-OCTOBER - PTI
Supply of coal by state-owned CIL to the power sector registered a decline of 8.5 per cent to 253 million tonnes in the April-October period of thi ...
Monday, 25 November 19
A 53,000DWT SHIP FIXED AT $9,500 DELIVERY SINGAPORE TRIP, VIA INDONESIA, REDELIVERY VIETNAM - BALTIC BRIEFING
Capesize
After a week of value being eroded on the Capesize market, Friday brought improved sentiment across most of the routes. The 5TC averag ...
Monday, 25 November 19
KOWEPO INVITED 6.79 MILLION TONS OF (SUB)BITUMINOUS STEAM COAL BIDS
COALspot.com: South Korea’s Korea Western Power Co., Ltd. (KOWEPO) has issued an international tender for 6,798,000 tons of coal for 5 years ...
Friday, 22 November 19
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 22 November 19
FORTY PERCENT OF ADARO'S COAL SALES VOLUME IN 9M19 GOES TO THE SOUTHEAST ASIA REGION
PT Adaro Energy Tbk released its consolidated financial statements yesterday, for the nine month period, ending September 30, 2019.
...
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- Salva Resources Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- PTC India Limited - India
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- MS Steel International - UAE
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Planning Commission, India
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Indian Oil Corporation Limited
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
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