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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, 04 September 19
SHIPPING MARKET INSIGHT - INTERMODAL
For yet another time, the market seems to have its own drivers. After a very disappointing first half, the recent recovery in the shipping market i ...
Tuesday, 20 August 19
NORDEN HAS BEEN AWARDED A 3-YEAR CONTRACT FOR THE TRANSPORTATION OF COAL FROM INDONESIA TO HONG KONG
NORDEN has been awarded a 3-year contract with a power company in Hong Kong for the transportation of coal from Indonesia to Hong Kong.
...
Tuesday, 20 August 19
THE AUGUST 2019 INDONESIAN COAL PRICE REFERENCE POSTS THE FIRST MONTHLY GAIN SINCE AUGUST 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Monday, 19 August 19
INDONESIAN COAL RUNS, A 82,000DWT SHIP WAS FIXED DELIVERY CHINA VIA INDONESIA, REDELIVERY JAPAN, IN THE MID $16,000S - BALTIC BRIEFING
Capesize
The Capesize market was buoyant in both basins this week, posting gains across the board. After bottoming out the previous week, rates ...
Sunday, 11 August 19
ULTRAMAX: A 58,000DWT VESSEL OPEN KEMAMAN FIXED FOR TWO TO THREE LADEN LEGS, REDELIVERY SINGAPORE-JAPAN, AT $12,250 - BALTIC BRIEFING
Capesize
With typhoon Lekima gathering pace, numerous China ports were closed by the end of the week and will likely be for two to three days. ...
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- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- MS Steel International - UAE
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Ministry of Mines - Canada
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Thai Mozambique Logistica
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- White Energy Company Limited
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- The University of Queensland
- Minerals Council of Australia
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Marubeni Corporation - India
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
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