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Friday, 20 March 20
VOLATILITY TO INCREASE IN TANKER MARKET FOLLOWING OIL PRICE WAR - DREWRY
Crude oil prices plunged by more than a third in the past week after OPEC+ failed to agree on production cut as demand softened in the aftermath of coronavirus (COVID-19). In its recent report, the IEA estimates global oil demand at 99.9 mbpd in 2020, which is around 90,000 bpd lower than in 2019 and a sharp downgrade from the agency’s forecast in February, which predicted global oil demand will grow 825,000 bpd in 2020.
The market expected OPEC+ to cut supply as the COVID-19 epidemic has spread from China to Europe, the Americas and Middle East. However, the negotiations failed due to strong resistance from Russia, which is of the view that the policy of capping production by OPEC+ producers to support the oil price is facilitating the development of US shale oil, with Russia losing its market share to increasing exports from the US.
After the failure of production cut talks in Vienna, Saudi Arabia started a price war by slashing the official selling prices for crude for key buyers in the international market and hinted at raising crude oil production to full capacity of 12.3 mbpd from April 2020. The ‘shock and awe’ tactics of Saudi Arabia could be a move to impose maximum pain in the quickest possible way to Russia and other producers, in an effort to renegotiate the proposed production cut and then quickly reverse the production surge and thereafter implement the production cut if a deal is reached.
However, the recent move by Saudi Arabia could lead to:
a) Renegotiation on a production cut between OPEC and Russia
b) Prolonged price war between OPEC, Russia and US producers
If there are fresh negotiations to implement a production cut by OPEC+ producers to accommodate the effect of declining oil demand, crude oil prices are expected to normalise.
But if there is a prolonged price war between Saudi Arabia, Russia and US shale oil producers, lower crude oil prices will lead to some improvement in global oil demand and refinery runs. At the same time, onshore stocking activity will also increase, especially in countries such as China as they build their Strategic Petroleum Reserve. A global supply glut is also likely to lead to an increase in floating storage especially among oil producers.
At the same time, sustained weakness in oil prices will eventually hurt US shale oil producers because of their relatively higher cost of production. In such circumstances, the market share of Middle Eastern crude will increase at the expense of US crude.
Meanwhile, tanker rates surged due to a sudden increase in VLCC chartering from Bahri, Saudi Arabia’s national shipping arm. Bahri fixed at least 18 VLCCs since the Kingdom aims to pump more crude into the market as its price war with Russia escalates. The VLCC earnings on Middle East–China (TD3C) route skyrocketed to $166,000pd on 11 March from $30,300pd on 06 March.
If Saudi Arabia manages to strike a deal with Russia to cut production in the short term, tanker rates will plummet to the pre-price war levels because of the ongoing weakness in crude oil trade on account of the spread of COVID-19 globally. On the other hand, if there is a prolonged price war, tonnage demand will rise initially with the increase in oil demand and stocking activity, which in turn will keep freight rates above pre-price war levels.
However, once sustained weakness in oil prices starts hurting US crude production, Middle Eastern crude will start displacing US crude in Asia. This in turn will squeeze tonne-mile demand for tankers as the distance between the US to Asia is almost double the distance between the Middle East to Asia. Thus we estimate that every barrel per day of annual decline in US exports to Asia at the expense of the Middle East will lead to about a 2.5% decline in overall tonne-mile demand for tankers. Freight rates in such a situation will plunge below the pre-price war levels.
Source: Drewry
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Sunday, 26 April 20
STRONGER BUNKER PRICES FAIL TO RALLY FREIGHT MARKET - FIS
VLSFO bunker prices rebounded by $22.50 to $229/mt in the port of Singapore but failed to turn around the spot freight market.
Some ...
Saturday, 25 April 20
KOREA SOUTH-EAST POWER CO. INVITED BIDS FOR 780K - 900K MT OF 5600 NCV COAL FOR JULY TO OCTOBER 2020 LOADING
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 780,000~900,000 Metric Tons (MT) s ...
Saturday, 25 April 20
SEAFARER MENTAL WELLBEING DURING THE COVID-19 PANDEMIC - STANDARD CLUB
KNOWLEDGE TO ELEVATE
COVID-19 has forced many parts of the world to enforce a lockdown in a bid to flatten the curve in terms of transmissions ...
Friday, 24 April 20
KOMIPO INVITED BIDS FOR 5700 NAR COAL FOR JUNE & JULY LOADING
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) Has Issued An International Tender For 260,000 Metric Tons (MT) Steam Coal ...
Friday, 24 April 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
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- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- White Energy Company Limited
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- Economic Council, Georgia
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- PTC India Limited - India
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Cigading International Bulk Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
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