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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, 17 April 20
PANDEMIC TO BRING ASIA'S 2020 GROWTH TO HALT FOR 1ST TIME IN 60 YEARS - IMF: REUTERS
Asia’s economic growth this year will grind to a halt for the first time in 60 years, as the coronavirus crisis takes an “unprecedented ...
Friday, 17 April 20
SAUDI ARABIA'S MAY 2020 OSPS FOR CRUDE EXPORTS BODE WELL FOR ASIAN REFINERS - WOOD MACKENZIE
On 13 April, Saudi Arabia announced the Official Selling Prices (OSPs) for its May crude oil exports. The new OSPs speak volumes about Saudi Arabia ...
Friday, 17 April 20
SEABORNE COAL PRICES UNDER PRESSURE AS DEMAND SOFTENS IN CHINA, INDIA - CLYDE RUSSELL
Worrying signs are emerging for coal exporters to the world’s biggest markets in Asia, as top buyers China and India move to favour domestic ...
Thursday, 16 April 20
THERMAL POWER SECTOR FACES BLEAK SCENARIO POST-COVID SITUATION - THE HINDU BUSINESS LINE
The centre should take a fresh look at coal-energy value chain as the sector tops the chart on loan defaults.
Covid-19 may have serv ...
Thursday, 16 April 20
CHINA'S BENCHMARK POWER COAL PRICE FALLS 5 YUAN PER TONNE - XINHUA
China’s benchmark power coal price fell by 5 yuan (about 70 U.S. cents) per tonne during the past week.
The Bohai-Rim Steam-Co ...
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- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Wood Mackenzie - Singapore
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
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