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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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Wednesday, 12 February 20
MARKET INSIGHT - INTERMODAL
The recent Coronavirus outbreak in China has led to a global health emergency by World Health Organization and it is yet to be seen how long the ph ...
Wednesday, 12 February 20
CHANGES IN LNG MARKET COULD UNDERCUT PLANS FOR NEW JAPANESE COAL PLANTS - CLYDE RUSSELL
Reuters: Clyde Russell
The collapse in the spot price of liquefied natural gas (LNG) in Asia is a short-term phenomenon that may wel ...
Wednesday, 12 February 20
THE SHIPPING INDUSTRY SEES FREIGHT MARKETS IN A COMPLETE STATE OF COLLAPSE AS DEMAND GETS PARALYZED DUE TO CORONAVIRUS OUTBREAK - ALLIED
With China and the world still trying to contain the effects and come to terms with the Wuhan novel coronavirus outbreak, the shipping industry see ...
Wednesday, 12 February 20
WORLD STEEL PRODUCTION IN 2019 - BANCHERO COSTA
In a worrying development, global steel production slowed down considerably in the fourth quarter of 2019. In the final 3 months of 2019, total cru ...
Sunday, 09 February 20
SUPRAMAX: THE ASIAN ARENA STRUGGLED, A 50,000DWT SHIP FIXING A COAL RUN FROM EAST KALIMANTAN TO INDIA AT $2,000 - THE BALTIC BRIEFING
Capesize
The Capesize market endured another dreadful week of calamitous rate level falls, as the usual season low Q1 period combined with rece ...
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Showing 1141 to 1145 news of total 6871 |
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- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Kartika Selabumi Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- Mintek Dendrill Indonesia
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Planning Commission, India
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- The University of Queensland
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- The Treasury - Australian Government
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- Parliament of New Zealand
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
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