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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, 05 May 20
SUPRAMAXES: YTD SLIDE HAS BEEN 45%, WITH THE AVERAGE FOR 2020 TCA HOLDING AT US$5,793 - ALLIED
It has been almost three months since the WHO officially categorized the current coronavirus outbreak as a global pandemic, an outbreak that has br ...
Monday, 04 May 20
U.S. ESTIMATED COAL PRODUCTION FALL 39.4% YEAR ON YEAR IN THE WEEK ENDED APRIL 25 - EIA
Estimated U.S. coal production totaled about 8.6 million short tons (MMst) For the week ended April 25, 2020, says EIA in its latest report.
E ...
Saturday, 02 May 20
SUPRAMAX: ASIA, STRONGER NUMBERS - A 55.000-DWT WAS FIXED FROM INDONESIA TO CHINA IN THE MID $6,000S - BALTIC BRIEFING
Capesize
A tepid week for the big ships, as macro concerns continued to weigh heavily on the index. All of the major voyage routes lost value, ...
Friday, 01 May 20
KOSPO INVITED OFFER FOR 5600 NCV COAL FOR Q3 2020 LOADING
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 260,000 Metric Tons (MT) steam coal for Boryeong Power ...
Friday, 01 May 20
GLOBAL COAL DEMAND TO FALL BY ABOUT 8% IN 2020,THE LARGEST DROP SINCE WORLD WAR II - IEA
We expect global coal demand to fall by about 8% in 2020, the largest drop since World War II, with coal use declining in virtually every sector of ...
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- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Straits Asia Resources Limited - Singapore
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- PTC India Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Krishnapatnam Port Company Ltd. - India
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- Wilmar Investment Holdings
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
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