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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, 10 July 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 10 July 20
GLOBAL SHIPPING EARNINGS FORECAST CUT AS SUPPLY SET TO OUTSTRIP DEMAND - MOODY'S
EBITDA forecast worsens, keeping outlook negative. We now expect the aggregate EBITDA of rated shipping companies to fall by around 16%-18% in 2020 ...
Friday, 10 July 20
SLOW RECOVERY IN TANKER RATES TO WEIGH ON BUANA LINTAS LAUTAN - FITCH RATINGS
Fitch Ratings believes that international tanker rates are likely improve after their sharp fall since May 2020, albeit at a slow pace. The weaknes ...
Wednesday, 08 July 20
MARKET INSIGHT - INTERMODAL
During the previous month, the dry bulk market witnessed an impressive increase in the BDI index that has reached 1800 points from 500 with a clear ...
Tuesday, 07 July 20
COAL INDIA WORKERS STRIKE CUTS OUTPUT BY 56%: OFFICIAL - REUTERS
A strike at Coal India Ltd cut production by 56% in the three days ending July 4 as workers oppose opening up coal mining to the private sector, a ...
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- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- PTC India Limited - India
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Australian Coal Association
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Makarim & Taira - Indonesia
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
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