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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, 16 September 19
COLOMBIAN COAL PRODUCTION TO FALL 5% THIS YEAR, MINING GROUP SAYS - REUTERS
Colombia’s coal production will decline to around 80 million tonnes in 2019, nearly 5% below last year’s, because of low prices and dro ...
Monday, 16 September 19
THE COAL-D SHOULDER? - BALTIC EXCHANGE
Good fortune and the number 13 don’t usually go hand in hand, but when it comes to coal, 2013 actually seems to have been the commodity&rsquo ...
Monday, 16 September 19
SCRUBBERS AND FUEL PROFIT SHARE CLAUSES - CLYDE&CO
From 1 January 2020, Regulation 14 of MARPOL Annex VI provides that the sulphur content in fuel oil used on board ships shall be reduced from a max ...
Monday, 16 September 19
KOREA SOUTH-EAST POWER INVITES BIDS FOR MAX 1,290,000 METRIC TONS OF STEAMING COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd has issued an international tender for total 1,290,000 Metric Tons steam coal.
...
Sunday, 15 September 19
SUPRAMAX / ULTRAMAX: MORE STEMS WERE NOTICED GOING TO VIETNAM FROM INDONESIA - BALTIC BRIEFING
Capesize
Overall it was a negative week for the Capesize market, with many routes losing ground. A limited amount of time charter appeare ...
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- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Anglo American - United Kingdom
- PTC India Limited - India
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Indian Energy Exchange, India
- GMR Energy Limited - India
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Indika Energy - Indonesia
- VISA Power Limited - India
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- The University of Queensland
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Ind-Barath Power Infra Limited - India
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
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