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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, 01 July 20
COLOMBIA'S COAL EXPORT VOLUMES HAVE STEADILY DECLINED IN RECENT YEARS - BANCHERO COSTA
Colombia is the world’s fifth largest seaborne exporter of coal, coming after Australia, Indonesia, Russia and the USA.
Export ...
Wednesday, 01 July 20
MARKET INSIGHT - INTERMODAL
It was beginning of 2020 – close to 6 months from now – when we first experienced the huge impact of the COVID 19 outbreak on Ship Repa ...
Monday, 29 June 20
INDONESIAN COAL AT THE MERCY OF THE DRAGON AND TIGER - GHEE PEH | IEEFA
Coal sector analysts have been busy in recent months mapping the negative impact of low coal prices from the COVID-19 pandemic on Indonesian coal c ...
Monday, 29 June 20
FALLING DEMAND IN CHINA AND INDIA SIGNAL TOUGH TIMES AHEAD FOR INDONESIAN EXPORTS - GHEE PEH | EEFA
Assessing the Impact on Indonesian Coal Companies
The bad news for Indonesia’s coal companies is that they are likely to have ...
Monday, 29 June 20
INDIA COAL IMPORT OUTLOOK: WEAK DEMAND, IMPORT SUBSTITUTION, EXPECT 20% YOY DECLINE - GHEE PEH | IEEFA
For India, the coal demand indicators have clearly turned negative.
According to Argus Media, since the government declared a ...
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- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- Sojitz Corporation - Japan
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- The University of Queensland
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
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