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Friday, 17 April 20
OPEC BRACES FOR OIL MARKET'S "HISTORIC SHOCK"
 OPEC released its much anticipated April monthly report.
Crude Oil Price Movements
Crude oil prices collapsed in March 2020, recording their deepest monthly drop since the global financial crisis in 2008. The ramifications of the COVID-19 pandemic were the main driving force, resulting in unprecedented worldwide oil demand shock and massive sell-offs in the global oil markets, amid a significant crude surplus. The OPEC Reference Basket (ORB) value was down by $21.61, or 38.9%, m-o-m, to stand at $33.92/b, the lowest monthly value since September 2003. ICE Brent declined by $21.75, or 39.2%, m-o-m, to average $33.73/b, while NYMEX WTI fell $20.09, or 39.8%, to average $30.45/b. The term structure of all three crude benchmarks – ICE Brent, NYMEX WTI and DME Oman – moved to a super contango in March, and money managers cut speculative net long positions.
World Economy
The world economy is forecast to face a severe recession in 2020, declining by 1.5%, following global economic growth of 2.9% in the previous year. Following tender signs of improvement at the beginning of the year, expectations for global economic growth were quickly burdened by the strong impact of the COVID-19 pandemic. Within the OECD, the US is forecast to contract by 4.1% in 2020, following growth of 2.3% in 2019. An even larger decline is expected in the Euro-zone, where economic activity is forecast to fall by 6.0% in 2020, compared to growth of 1.2% in 2019. Japan is forecast to contract by 3.9% in 2020, comparing to growth of 0.7% in 2019. China’s 2020 GDP is forecast to grow by 1.5%, recovering from a sharp contraction in 1Q20 and following growth of 6.1% in 2019. India is forecast to grow by only 2.0%, a sharp slowdown from already weakening growth of 5.3% in 2019. Brazil’s economy is forecast to contract by 2.4% in 2020, following growth of 1.0% in 2019. Russia’s economy is forecast to contract by 0.5% in 2020, after growth of 1.4% in 2019, not only due to COVID-19, but also because of the considerable decline in oil prices. As risk remains to be skewed to the downside, further revisions may be warranted going forward.
World Oil Demand
World oil demand growth forecast for 2019 is kept unchanged at 0.83 mb/d, compared with the previous month’s assessment. For 2020, the world oil demand growth forecast is revised lower by 6.9 mb/d, to a historical drop of around 6.8 mb/d. The contraction in the 2Q of this year is expected to be around 12 mb/d, with April witnessing the worst contraction at about 20 mb/d. The impact of the COVID-19 outbreak in China in 1Q20, and its negative impact on transportation and industrial fuels in the country, has since spread globally and is now affecting oil demand growth in most other countries and regions, with an unprecedented impact on global oil demand, transportation fuels in particular. As a result, OECD oil demand is revised lower by 3.7 mb/d to decline by 4.0 mb/d, while non-OECD oil demand growth is adjusted lower by 3.2 mb/d to contract by 2.9 mb/d for the year. Considering latest developments, and the large uncertainties going forward, downward risks remain significant, suggesting possibility of further adjustments, especially in the 2Q, should new data and further developments warrant revisions.
World Oil Supply Non-OPEC oil supply growth in 2019 is revised down by 0.01 mb/d from the previous month’s assessment and is now estimated at 1.98 mb/d. For 2020, non-OPEC oil supply is forecast to decline by 1.50 mb/d, a downward revision of 3.26 mb/d from the previous projection. The impact of COVID-19, ensuing global economic recession and oil demand shock, will also lead to supply disruptions. Benchmark oil prices plunge prompted companies to respond by cutting capital expenditure to the lowest in 13 years. The 2020 oil supply growth forecast for the US was revised down by 1.05 mb/d to show a decline of 0.15 mb/d y-o-y. The supply growth for the 10 non-OPEC countries participating in the Declaration of Cooperation has also been adjusted lower. Oil supply in 2020 is now forecast to show growth only in Norway, Brazil, Guyana and Australia. OPEC NGLs production in 2019 is estimated to have grown by 0.04 mb/d to average 4.79 mb/d and for 2020 will grow by 0.04 mb/d to average 4.83 mb/d. In March, OPEC crude oil production increased by 821 tb/d m-o-m to average 28.61 mb/d, according to secondary sources.
Product Markets and Refining Operations
Global refinery margins globally showed mixed performance during March. In the US, margins weakened as strength in gasoil/diesel was offset by losses in gasoline cracks, as complex margins came close to negative territory. In Europe, product markets strengthened slightly at the middle of the barrel, supported by a fall in feedstock prices. An already relatively tight global gasoil market saw support from output cuts and continued critical industrial activities for essential services and goods amid COVID-19. However, in Asia, margins eased towards the end of the month, pressured by a weaker top of the barrel, despite healthy gasoil and fuel oil crack spreads.
Tanker Market
The tanker market has been one of few segments of the oil industry that enjoyed positive momentum in March. A sudden surge in crude exports boosted demand for VLCCs, which pulled up Suezmax rates as well. Dirty spot freight rates declined mid-month before climbing again as the market was supported by high demand for tankers as charterers rushed to place cargoes amid a collapse in demand due to the COVID-19 pandemic. Increased options for time-chartering, including for floating storage, underscored the build-up of excess supply of crude and products in the market. For the month, dirty spot rates averaged 69% higher m-o-m in March. Clean tanker spot freight rates rose 12% m-o-m, as the need to find homes for excess product supplies supported the market.
Trade
Crude and product trade flows have been notably affected by the COVID-19 pandemic and the uncertain outlook going forward, although there has been some lag in how the various regions have been affected. US crude exports had a strong start to the year, averaging 3.5 mb/d in 1Q20, a gain of 0.8 mb/d over the same quarter last year, as the US remained a net liquids exporter for the seventh-consecutive month. Meanwhile, China’s crude imports averaged 10.5 mb/d over the first two months of 2020, declining from December as disruptions caused by COVID-19 led to some imports being diverted or delayed. Product trade was also affected, with imports and exports averaging 0.3 mb/d lower in the first two months of the year compared to December. Official data showed India’s crude imports increasing slightly in February, although some estimates show a higher jump as the country took in some discounted cargoes diverted from China. India’s crude and product trade is likely to be broadly impacted in March by a government-ordered lockdown.
Stock Movements
OECD commercial oil stocks rose by 5.6 mb, m-o-m, in February to stand at 2,945 mb. This was 64.3 mb higher than the same time one year ago and 24.7 mb above the latest five-year average. Within components, crude stocks fell by 6.1 mb, while product stocks rose by 11.7 mb, m-o-m. In terms of days of forward cover, OECD commercial stocks rose by 5.0 days, m-o-m, in February to stand at 72.7 days. This was 11.5 days above the same period in 2019, and 10.3 days above the latest five-year average. Preliminary data for March showed that US total commercial oil stocks increased by 8.2 mb, m-o-m, to stand at 1,922 mb. This was 31.8 mb, or 1.7%, above the same period a year ago, and 16.2 mb, or 0.8%, lower than the latest five-year average. Within components, crude stocks rose by 25.1 mb, while product stocks fell by 16.8 mb, m-o-m.
Balance of Supply and Demand
Demand for OPEC crude in 2019 stood at 29.9 mb/d, 1.2 mb/d lower than the 2018 level. Following the recent agreement reached at the extraordinary OPEC and non-OPEC Ministerial Meetings, the demand for OPEC crude in 2020 is expected at 24.5 mb/d, around 5.4 mb/d lower than the 2019 level, though this remains heavily subject to uncertainty surrounding current market conditions.
Source: OPEC
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Friday, 21 August 20
BHP COMMITS TO SELLING ITS THERMAL COALMINES WITHIN TWO YEARS - THE GUARDIAN
Move follows pressure from investors but company stops short of full exit from coalmining
BHP has announced it plans to sell off its ...
Thursday, 20 August 20
MINER BHP CONFIRMS PLANS TO EXIT THERMAL COAL SECTOR - THE SYDNEY MORNING HERALD
The head of mining giant BHP has laid out plans for a reshaping of its global operations by seeking to quit thermal coal mining, offload some cokin ...
Thursday, 20 August 20
LONDON RETAINS ARBITER CROWN - BALTIC EXCHANGE | HFW
Fears that the UK’s decision to leave the European Union would dent the reputation of the nation’s capital as the leader in maritime ar ...
Wednesday, 19 August 20
U.S. COAL STOCKPILES STEADILY INCREASE AFTER REACHING LOWEST LEVEL IN A DECADE IN 2019 - EIA
After reaching their lowest level in more than a decade in March 2019, U.S. coal stockpiles steadily increased to 152 million tons in April 2020, r ...
Wednesday, 19 August 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.26 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.92 points Monday, down 0.26 percent week on week.
The index, released by Chi ...
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- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- Planning Commission, India
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- MS Steel International - UAE
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- White Energy Company Limited
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Indogreen Group - Indonesia
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- VISA Power Limited - India
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- IEA Clean Coal Centre - UK
- ASAPP Information Group - India
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
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