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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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- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- London Commodity Brokers - England
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- PTC India Limited - India
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Interocean Group of Companies - India
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- White Energy Company Limited
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
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