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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, 07 June 19
KOEN INVITED BIDS FOR 1.87 MILLION TONS OF COAL FOR JULY - OCTOBER 2019 DELIVERY
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 1,700,000 to 1,870,000 Metric Tons ...
Wednesday, 05 June 19
SHIPPING MARKET INSIGHT - INTERMODAL
The first semester of 2019 started as a fairly positive semester for the offshore sector whilst there was a recovery on crude prices, as well as a ...
Tuesday, 04 June 19
MARPOL ANNEX VI - SULPHUR CAP 2020 - DEMYSTIFYING THE FONAR - SKULD
KNOWLEDGE TO ELEVATE
Fuel Oil Non-Availability Report (FONAR) is primarily a discretionary tool for a Member State to lessen the breach of MAR ...
Monday, 03 June 19
SUPRAMAX: A 61,000 TONNER OPEN NORTH CHINA, FIXING A TRIP VIA INDONESIA, REDELIVERY SOUTHEAST ASIA AT $7,500 - BALTIC BRIEFING
Capesize
The market continued its steady ascent over the past week to improved levels. The TC average opened the previous week at $12,243 and c ...
Wednesday, 29 May 19
SHIPPING MARKET INSIGHT - INTERMODAL
Reflecting on the first quarter of 2019, the product tanker market was healthy, with average earnings significantly up compared to the first quarte ...
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- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- The University of Queensland
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Posco Energy - South Korea
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Tamil Nadu electricity Board
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Baramulti Group, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
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