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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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Wednesday, 19 August 20
COAL INDIA TRADE UNIONS DEFER DAY-LONG STRIKE: PTI
The unions had decided to go on strike against the commercial mining and the proposed divestment or buyback of shares of Coal India Ltd (CIL).
...
Wednesday, 19 August 20
MISC MARKS ITS MAIDEN FORAY INTO MAJOR DEEP-WATER PROJECT IN LATIN AMERICA WITH MERO 3 FPSO
MISC Berhad (MISC) is pleased to announce its acceptance of Letter of Intent (LOI) from Petróleo Brasileiro S.A. (Petrobras) for the provisi ...
Wednesday, 19 August 20
MARKET INSIGHT - GEORGE LAIOS | INTERMODAL
Since the Covid-19 outbreak, governments and central banks around the globe have been using their ammunition and stimulus packages to keep their ec ...
Wednesday, 19 August 20
INDIA SAW A SHARP DECLINE IN ENERGY COAL IMPORTS IN JANUARY - JUNE 2020; –27 PER CENT YOY - BHP
Energy coal prices were weak in the second half of financial year 2020, BHP says in its Economic and Commodity Outlook FY20.
Accordi ...
Wednesday, 19 August 20
COAL PRICES TO REMAIN SUBDUED THIS FISCAL AMID WEAK DEMAND, HIGH INVENTORY - THE HINDU BUSINESS LINE
Coal offtake is improving gradually as lockdown eases
Coal prices are expected to remain subdued to weak demand and high inventory l ...
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- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Planning Commission, India
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
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