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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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Thursday, 04 June 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 04 June 20
DON'T FORGET THE REAL PURPOSE OF RISK ASSESSMENTS - GARD
KNOWLEDGE TO ELEVATE
When doing a risk assessment, we often overcomplicate it and forget its real purpose.
Rather than ensuring that crew ...
Wednesday, 03 June 20
MARKET INSIGHT - INTERMODAL
Once again shipping is about to venture into uncharted waters and before the challenges of the past decade are forgotten, shipowners will have to o ...
Tuesday, 02 June 20
KOSPO LOOKING FOR 80000 MT OF 4200 NCV COAL FOR JULY
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 Metric Tons (MT) 4200 NCV coal for 12 - 21, July ...
Tuesday, 02 June 20
INDONESIAN COAL MINER BUMI RESOURCES Q1 OUTPUT UP 5% - REUTERS
Indonesia’s largest coal miner Bumi Resources posted a 5% increase in first-quarter output at 20.8 million tonnes, the company said in a stat ...
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- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Uttam Galva Steels Limited - India
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- Pendopo Energi Batubara - Indonesia
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- The University of Queensland
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- Indo Tambangraya Megah - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Energy Development Corp, Philippines
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
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