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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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Friday, 13 March 20
TOP 4 ACCOUNTING CONSIDERATIONS AFTER THE IMPLEMENTATION OF IMO 2020 - PWC
To install or not to install?
Following the IMO 2020 global low sulphur cap for marine fuel effective since 1 January 2020, many shi ...
Friday, 13 March 20
CHINA'S BENCHMARK POWER COAL PRICE DROPS SLIGHTLY - XINHUA
China’s benchmark power coal price dropped slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...
Friday, 13 March 20
KOREA SOUTH-EAST POWER INVITED BIDS FOR 390,000 MT OF THERMAL COAL FOR MAY-JUNE 2020 LOADING
COALspot.com: Korea South-East Power Co., Ltd. (KOEN), has issued an international tender for total 390,000 Metric Tons of coal for May & June ...
Thursday, 12 March 20
INDIA 2019 THERMAL COAL IMPORTS RISE 12.6% TO NEARLY 200 MILLION TONNES - REUTERS
India’s thermal coal imports rose 12.6% to nearly 200 million tonnes in 2019, government data reviewed by Reuters showed, reflecting the seco ...
Wednesday, 11 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.07 PCT - XINHUA
China Taiyuan coal transaction price index stood at 133.16 points Monday, up 0.07 percent week on week.
The index, released by China ...
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- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Sindya Power Generating Company Private Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Eastern Energy - Thailand
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Minerals Council of Australia
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- Marubeni Corporation - India
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
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