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