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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, 12 August 20
THE COAL MARKET IN ITALY - ASSOCARBONI
Italy, which in 2019 reported a decrease in thermal coal imports, with a volume of 7,5 million tons (-32% compared to 11 million tons in 2018), whi ...
Wednesday, 12 August 20
U.S. COAL PRODUCTION IN 2020 WILL DECREASE BY 29% FROM 2019 LEVELS TO 502 MMST - EIA
U.S. coal consumption, which dropped to its lowest point since April, totaled 95 MMst in the second quarter of 2020.
EIA expec ...
Tuesday, 11 August 20
BHP COAL ASSETS WORTH A BILLION LESS THAN JUST TWO YEARS AGO - IEEFA
Another global investor, the UK’s biggest public pension fund NEST, has withdrawn funds from BHP this week because the company is profiting & ...
Monday, 10 August 20
COAL IMPORT DROPS 43% IN JULY OWING TO HIGH STOCKPILE AT PITHEADS, PLANTS - PTI
“The market participants seem to have adopted a wait and watch approach and are currently looking for a direction. We do not expect to see an ...
Saturday, 08 August 20
GLOBAL COAL POWER PUZZLE - BALTIC EXCHANGE
Global Energy Monitor’s latest Global Coal Plant Tracker has put another nail in the coffin for the coal-carrying fleet with its finding that ...
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- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Mercator Lines Limited - India
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- The University of Queensland
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Vedanta Resources Plc - India
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Australian Coal Association
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
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