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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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Sunday, 07 June 20
A SCRUBBER FITTED 61,000 ULTRAMAX WAS FIXED DELIVERY PHILIPPINES TRIP VIA SOUTH AFRICA REDELIVERY VIETNAM AT $9,500 - BALTIC BRIEFING
Capesize
The small flicker of hope at the beginning of this week has kindled a small fire under the Capesize market. At a paltry $3369 from the ...
Saturday, 06 June 20
KOREA SOUTH-EAST POWER CO INVITED COAL BIDS FOR MIN 5600 NCV COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 270,000 Tons (MT) min. 5600 NCV co ...
Friday, 05 June 20
COAL INDIA ESTIMATES PRODUCTION GROWTH BY OVERBURDEN REMOVAL - FINANCIAL EXPRESS
PSU miner Coal India (CIL) has now limited mining only to Overburden Removal (OBR) with falling demand of coal. The mining behemoth is now keeping ...
Friday, 05 June 20
U.S. SANCTIONS COMPLIANCE GUIDANCE RELEASED FOR THE GLOBAL MARITIME, ENERGY AND METALS SECTORS - AKIN GUMP
Key Points
On May 14, 2020, OFAC, the Department of State and the U.S. Coast Guard jointly released guidance for persons involved in the ma ...
Friday, 05 June 20
IN THE FIRST 5 MONTHS OF 2020 AUSTRALIA SHIPPED 6.8 MLN TONNES TO VIETNAM - BANCHERO COSTA
In the first 5 months of 2020, global seaborne coal trade declined by as much as -8% year-on-year, according to vessel tracking data from Ref ...
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- Banpu Public Company Limited - Thailand
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Planning Commission, India
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Indian Oil Corporation Limited
- Australian Coal Association
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
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