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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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Monday, 09 March 20
OPEC+ 'NO DEAL' A BLOW TO THE MARKET - WOOD MACKENZIE
Speaking after today’s OPEC+ meeting broke up, Ann-Louise Hittle, vice president, Macro Oils, at Wood Mackenzie, said: “Today’s o ...
Monday, 09 March 20
KOREA EAST-WEST POWER INVITED BIDS FOR 150,000 MT OF MIN 4,400 - MAX 5,499 NAR COAL
COALspot.com: KOREA EAST-WEST POWER CO. LTD. of South Korea has issued an international tender for total 150,000 MT of LCV coal for May – Jun ...
Sunday, 08 March 20
SUPRAMAX: A 55,000DWT VESSEL FIXING DELIVERY FROM EAST KALIMANTAN FOR A TRIP TO VIETNAM AT $9,100 - BALTIC BRIEFING
SUPRAMAX/ULTRAMAX - A 56,000DWT VESSEL FIXED DELIVERY SOUTH CHINA TRIP VIA INDONESIA, REDELIVERY EAST COAST INDIA, IN THE $6,000S
SUPRAMAX/U ...
Friday, 06 March 20
CHINA RESUMES 83.4 PCT COAL PRODUCTION CAPACITY AMID EPIDEMIC - XINHUA
China has resumed 83.4 percent of its coal production capacity amid the fight against the novel coronavirus outbreak, the National Energy Administr ...
Friday, 06 March 20
COLOMBIAN COAL OUTPUT FELL 2% IN 2019 - REUTERS
Coal production in Colombia, the fifth-largest coal exporter in the world, fell 2% to 82.2 million tonnes in 2019 after output at one of the princi ...
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- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- European Bulk Services B.V. - Netherlands
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- Planning Commission, India
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Cigading International Bulk Terminal - Indonesia
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- South Luzon Thermal Energy Corporation
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
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