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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, 17 June 20
MARKET INSIGHT - INTERMODAL
After experiencing record earnings during the first half of the year, the focus of headlines concerning the tanker market has shifted from the deve ...
Wednesday, 17 June 20
KOREA SOUTHERN POWER CO INVITED 80000 MT OF LOW CALORIFIC VALUE COAL FOR AUGUST 1H, 2020 LOADING
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 Metric Tons (MT) Min 4,200 kcal/kg - Max. ...
Tuesday, 16 June 20
A GLOBAL ECONOMIC SLUMP: WHAT WILL IT MEAN FOR METALS AND MINING? - WOOD MACKENZIE
Back before coronavirus knocked “normal” out cold, the key issues for miners were sub-investment prices, rising requirements for ESG an ...
Tuesday, 16 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.58 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.43 points Monday, up 0.58 percent week on week.
The index, released by China ...
Tuesday, 16 June 20
HIGHER IRON ORE PRICES OFFSET CORONAVIRUS-DRIVEN PRODUCTION RISK - FITCH RATINGS
Lower iron ore production in Brazil, resulting from rising coronavirus infections, should only marginally affect the cash flow of Vale and other gl ...
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- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Coal and Oil Company - UAE
- Ministry of Finance - Indonesia
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Minerals Council of Australia
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- The University of Queensland
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Indian Energy Exchange, India
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Intertek Mineral Services - Indonesia
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
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