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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, 29 June 20
CHINA COAL IMPORT OUTLOOK: MANY MOVING PARTS, FORECAST TO FALL 10% YOY - GHEE PEH | IEEFA
China’s coal demand declined in the first quarter of 2020. According to the China National Coal Association, the country consumed 870mt in th ...
Monday, 29 June 20
ULTRAMAX: A 58,000 FIXING DELIVERY SINGAPORE TRIP, VIA EAST COAST INDIA, REDELIVERY CHINA IN THE LOW $12,000S - BALTIC BRIEFING
Capesize
As the halfway mark of 2020 arrives, the capesize market is making new highs for the year. From persistent lows earlier caused by a ba ...
Saturday, 27 June 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 26 June 20
WHAT TODAY'S BAILOUTS CAN DO FOR TOMORROW'S ECONOMIES - WORLD ECONOMIC FORUM
The COVID-19 crisis provides an opportunity for governments to build fairer, more sustainable and more resilient economies.
Governments a ...
Thursday, 25 June 20
ALL YOU WANT TO KNOW ABOUT COAL MINE AUCTIONS - THE HINDU BUSINESS LINE
Last week, Prime Minister Narendra Modi threw open the auction of 41 coal blocks for commercial mining. The decision, which was part of the announc ...
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- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
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- PTC India Limited - India
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- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Interocean Group of Companies - India
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- Minerals Council of Australia
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Altura Mining Limited, Indonesia
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
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- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
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- Energy Link Ltd, New Zealand
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- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
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- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Indian Energy Exchange, India
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Wilmar Investment Holdings
- SMC Global Power, Philippines
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- Kaltim Prima Coal - Indonesia
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- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
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