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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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Thursday, 16 April 20
CHINA'S BENCHMARK POWER COAL PRICE FALLS 5 YUAN PER TONNE - XINHUA
China’s benchmark power coal price fell by 5 yuan (about 70 U.S. cents) per tonne during the past week.
The Bohai-Rim Steam-Co ...
Thursday, 16 April 20
MARKET INSIGHT - INTERMODAL
As everyone anticipated the results of the OPEC + G20 meeting last week, it was very interesting to watch the reaction of tanker rates that were in ...
Monday, 13 April 20
SUPRAMAX: A 56,000DWT SHIP WAS FIXED DELIVERY PARADIP, REDELIVERY CHINA, AT $4,700 - BALTIC BRIEFING
Capesize
The Capesize market this past week looks to have come off life support and found some improved sentiment. The week began rather ordina ...
Saturday, 11 April 20
FAQ: COVID-19 AND CLUB COVER - UK P&I
KNOWLEDGE TO ELEVATE
The Coronavirus (COVID-19) pandemic has generated a significant number of enquiries and questions from Members in recent ...
Saturday, 11 April 20
KOEN POWER PLANTS INVITED BIDS FOR 1.5 -1.62 MMT OF STEAM COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 1,500,000-1,620,000 Metric Tons (M ...
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Showing 1016 to 1020 news of total 6871 |
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- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Borneo Indobara - Indonesia
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- VISA Power Limited - India
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Thai Mozambique Logistica
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Larsen & Toubro Limited - India
- The University of Queensland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
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