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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, 01 July 19
COAL DEMAND RISES, BUT REMAINS BELOW PEAK LEVELS - FORBES
This article is the third in a series on BP’s recently-released Statistical Review of World Energy 2019. The Review provides a comprehensive ...
Saturday, 29 June 19
ULTRAMAX: FROM SOUTHEAST ASIA MORE COAL WAS ENTERING THE MARKET - BALTIC BRIEFING
Capesize
The market showed variability over the past week, as most routes were active yet sentiment differed from region to region. The Pacific ...
Wednesday, 26 June 19
SHIPPING MARKET INSIGHT - INTERMODAL
As the first half of the year is almost over, it is worth looking back at the sale and purchase activity during these months, focusing on the segme ...
Tuesday, 25 June 19
THERMAL COAL FUTURES ON THE ZHENGSHOU EXCHANGE ROSE - DANIEL HYNES
Coal markets were buoyed by ongoing supply side issues.
According to Daniel Hynes, Senior Commodity Strategist of ANZ, the the ...
Monday, 24 June 19
KOMIPO INVITED BITUMINOUS COAL BIDS FOR BORYEONG & SHIN BORYEONG POWER PLANTS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 260,000 MT MT of min. 5700 NAR coal and 240,000 MT of min. 4,600 k ...
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- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- The University of Queensland
- Karaikal Port Pvt Ltd - India
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Sojitz Corporation - Japan
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Anglo American - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Wood Mackenzie - Singapore
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
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