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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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- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Australian Coal Association
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
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