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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, 21 May 20
KOMIPO INVITED BIDS FOR TOTAL 610000 MT OF LCV AND HCV COAL FOR 2H 2020
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) has Issued an International Tender for 130,000 mt of 5700 NCV coal an ...
Wednesday, 20 May 20
ADARO ENERGY BOOKED A 5% INCREASE IN COAL PRODUCTION VOLUME Y-O-Y IN 1Q2020
PT. Adaro Energy Tbk, Indonesia’s one of the largest coal miner, booked a 5% increase in coal production volume year-over-year in 1Q2020. The ...
Wednesday, 20 May 20
BRAZIL SOYBEAN EXPORTS HAVE BEEN SURGING THIS YEAR - BANCHERO COSTA
Brazil soybean exports have been surging this year, thanks to a combination of strong demand from China, a bumper crop, and favourable exchange rat ...
Wednesday, 20 May 20
MARKET INSIGHT
Seafarers keep maritime trade going so that the food, raw materials, energy and manufactured goods on which so many depend can continue moving arou ...
Tuesday, 19 May 20
AMENDMENT OF THE INDONESIAN MINING LAW: TYING UP LOOSE ENDS - UMBRA
KNOWLEDGE TO ELEVATE
The finalized draft of Law on the amendment of the Mining Law (Bill) was publicly released on 11 May 2020 and was then ap ...
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- Indo Tambangraya Megah - Indonesia
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Tamil Nadu electricity Board
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Indika Energy - Indonesia
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Sakthi Sugars Limited - India
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- VISA Power Limited - India
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
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