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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, 07 May 20
CRUDE OIL TANKER EARNINGS DROP 68% IN NINE DAYS - BIMCO
Crude oil tanker earnings have come down sharply in recent weeks with Very Large Crude Carrier (VLCC) earnings from the Middle East Gulf to China d ...
Thursday, 07 May 20
UKRAINE PRODUCES 2.5 MLN TONNES OF COAL IN APRIL - UKRINFORM
Ukraine produced 2.5 million tonnes of coal in April 2020, which is 39% less than planned, according to the Coal Miners Union of Ukraine.
...
Thursday, 07 May 20
INDIA: GOVT TO DO AWAY WITH MANDATORY WASHING OF COAL FOR THERMAL POWER UNITS - BUSINESS STANDARD
The Centre is planning to do away with the mandatory requirement of washing of coal before it is transported to thermal power stations. The Ministr ...
Thursday, 07 May 20
CIL'S SUPPLY TO POWER SECTOR FALLS IN MARCH AMID SLUMP IN COAL DEMAND - PTI
The supply of coal to the power sector by state-owned CIL registered a decline of eight per cent to 42.30 million tonne in March in the wake of slu ...
Thursday, 07 May 20
COAL PRICE REFERENCE FALL SHARPLY IN MAY 2020 DUE TO CORONAVIRUS OUTBREAK
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
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- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Bhushan Steel Limited - India
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Minerals Council of Australia
- Economic Council, Georgia
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Trasteel International SA, Italy
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- PTC India Limited - India
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- Australian Coal Association
- New Zealand Coal & Carbon
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Independent Power Producers Association of India
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- White Energy Company Limited
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
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