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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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Friday, 24 April 20
COAL INDIA TO PRODUCE 710 MT COAL - MINISTER OF COAL AND MINES
Coal India Limited (CIL) will produce 710 million tonnes (MT) of coal and company’s coal off take target will also remain at710 MT for this f ...
Friday, 24 April 20
CHINA COAL PRODUCER YANZHOU COAL POSTS 9.6 PCT RISE IN 2019 NET PROFIT - XINHUA
China’s major coal producer Yanzhou Coal Mining Co., Ltd. said Thursday that its net profit saw a 9.6 percent rise in 2019.
Th ...
Tuesday, 21 April 20
INDONESIA ACCOUNTS FOR 19% OF JAPAN'S TOTAL COAL IMPORTS - BANCHERO COSTA
Coal trade in Asia is proving remarkably resilient this year, despite the global economic impact from COVID-19.
We have seen China&r ...
Tuesday, 21 April 20
COVID-19: CHARTERPARTY MATTERS FOR SHIPOWNERS - SKULD
KNOWLEDGE TO ELEVATE
Whilst the plight of cruise ships, stranded off shore with sick passengers and crew, may be dominating media headlines, t ...
Monday, 20 April 20
SUPRAMAX: A 52,000DWT SHIP FIXING AN INDONESIA COAL RUN TO CHINA AT $4400 - BALTIC BRIEFING
Capesize
This week was the strongest period seen for the Capesize market in several months. All routes globally succumbed to improved sentiment ...
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- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- Parliament of New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Australian Coal Association
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- The University of Queensland
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Planning Commission, India
- Mjunction Services Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
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