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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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Tuesday, 09 June 20
BUNKER SUPPLY CONTRACTS - KEY CONSIDERATIONS FOR THE BUYER - GARD
KNOWLEDGE TO ELEVATE
Regardless of whether a buyer purchases fuel directly from physical suppliers or via brokers or traders and whether sale ...
Tuesday, 09 June 20
INDIA: COAL IMPORT DROPS BY 20% TO NEARLY 19 MILLION TONNES IN MAY, SAYS REPORT - HINDUSTAN TIMES
The country’s coal import dropped by 20 per cent to 18.93 million tonnes (MT) last month, industry data showed.
The government ...
Monday, 08 June 20
WOOD MACKENZIE: THE INDISPENSABLE OPEC+
Rumours of “the death of OPEC” have been circulating for almost as long as the organisation has existed. Just three years after the car ...
Monday, 08 June 20
CHINA'S COAL IMPORTS FALL NEARLY 20% IN MAY EVEN AS DEMAND RISES - REUTERS
China’s coal imports in May fell nearly 20% compared with a year earlier even as demand recovered at power plants and industrial users, custo ...
Monday, 08 June 20
JUNE 2020 INDONESIAN COAL PRICE REFERENCE HIT US$ 52.98 A TON, ITS LOWEST LEVEL SINCE AT LEAST AUGUST 2016
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
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- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- Australian Coal Association
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Planning Commission, India
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- The University of Queensland
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Minerals Council of Australia
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Rio Tinto Coal - Australia
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- India Bulls Power Limited - India
- Thai Mozambique Logistica
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Aditya Birla Group - India
- White Energy Company Limited
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
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