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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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Wednesday, 11 September 19
THE INDONESIAN COAL PRICE REFERENCE FELL HEAVILY IN SEPTEMBER
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 11 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
We are going through one of the rare instances where we see optimism building in the dry bulk industry and, as the momentum is still going, the bel ...
Monday, 09 September 19
INDIAN COMPANIES READY TO INVEST IN DEVELOPMENT OF NEW COAL DEPOSITS IN RUSSIA'S YAKUTIA - TASS
Indian metallurgical companies, which received trial batches of coal from Kolmar mining company, are satisfied with the quality of the products and ...
Monday, 09 September 19
COLOMBIA COAL OUTPUT DOWN YEAR-ON-YEAR IN 2ND QUARTER - REUTERS
Colombia, the world’s fifth-largest exporter of coal, produced 18.9 million tonnes of the fuel in the second quarter, down 4.5% from the same ...
Monday, 09 September 19
ULTRAMAX: ASIA A 58,000-TONNER FIXED DELIVERY FUZHOU, VIA INDONESIA, REDELIVERY CHINA, AT $12,800
Capesize
0px The market reached new heights this week as the 5TC topped $38,014, a level not seen in the sector since 2013. Fridays 5TC closed ...
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- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Posco Energy - South Korea
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Planning Commission, India
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Parliament of New Zealand
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
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