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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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Monday, 20 July 20
COAL INDIA LAUNCHES SPECIAL CATEGORY OF E-AUCTION FOR COAL IMPORTERS - BUSINESS STANDARD
Coal India (CIL) on Friday launched a special category of e-auction for importers of coal. This is in line with the government’s declaration ...
Monday, 20 July 20
OIL PRICE OF $40-43 PER BARREL MORE OR LESS BALANCED - NOVAK | TASS
The Russian Ministry of Energy considers the current oil price of $40-43 per barrel more or less balanced and does not expect price changes after t ...
Monday, 20 July 20
SUPRAMAX: A 63,000 OPEN NORTH CHINA FIXING AN AUSTRALIAN ROUND IN THE LOW $10,000S - BALTIC BRIEFING
Capesize
The capesize market showed some resistance this week to recent losses as all routes saw a small uptick in value to end the week. With ...
Friday, 17 July 20
MISC MALAYSIA ENTERS INTO PURCHASE AGREEMENTS AND TIME CHARTER PARTIES FOR SIX VLECS
MISC Berhad (MISC) has entered into Memorandum of Agreements (MOAs) with six indirect wholly-owned subsidiaries of Zhejiang Satellite Petrochem ...
Wednesday, 15 July 20
HOW MEANINGFUL ARE SOME ESTIMATES FOR INDIA’S COAL CONSUMPTION DATA? - IEEFA
In recent years, BP's estimates for India have contained what appears to be a record of over-optimistic projections
BP’s a ...
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- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- VISA Power Limited - India
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Georgia Ports Authority, United States
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
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