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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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Friday, 22 November 19
UNCERTAINTY IN THERMAL COAL MARKET PERSISTED IN 3Q19 - ADARO
Uncertainty in thermal coal market persisted in 3Q19, mainly due to the actions, or inactions, of China in setting policies for global coal market. ...
Friday, 22 November 19
CIL TO DEVELOP 55 NEW COAL MINES IN NEXT 5 YEARS: COAL MINISTER
State-owned CIL will develop 55 new coal mines and expand 193 existing ones in the next five years, Parliament was informed. The company is also un ...
Thursday, 21 November 19
4TH DEEP OFFSHORE WEST AFRICA CONGRESS 2020
4th Deep Offshore West Africa Congress 2020
17 Janaury 2020
Accra, Ghana
Press Release: Following the great succ ...
Thursday, 21 November 19
INDONESIA PLANS TO KEEP $70/T COAL PRICE CAP FOR PLN, DMO - REUTERS
Indonesia’s energy minister Arifin Tasrif said his ministry plans to maintain a price cap on coal being sold to state electricity utility, PT ...
Wednesday, 20 November 19
FOREIGN DIRECT INVESTMENTS IN COMMERCIAL COAL MINING IN INDIA? - DIPESH DIPU
In August 2019, Government of India announced its approval for Foreign Direct Investment (FDI) for coal mining, processing and sale. Not that FDI i ...
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- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Economic Council, Georgia
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Planning Commission, India
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Energy Development Corp, Philippines
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
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