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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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Wednesday, 01 April 20
TRADERS SCRAMBLE TO SELL CHEAP CRUDE CARGOES AS GLUT GROWS - REUTERS
Oil traders across the globe are offering cargoes far in advance as rapidly vanishing demand drives key physical crude prices to multi-decade lows, ...
Wednesday, 01 April 20
MARKET INSIGHT - INTERMODAL
There is an old, allegedly Chinese, saying suggesting that living in “interesting” times usually refers to times of trouble. The latest ...
Tuesday, 31 March 20
FREIGHT MARKET: DRY BULKERS - SPOT MARKET 23-29 MARCH 2020
Capesize
The rebound in freight rates resumed this past week, with rates man-aging to post further gains by week’s end. The BCI is in negat ...
Tuesday, 31 March 20
DRY BULK: Q1 HAS BEEN THE WORST QUARTER NOTED FOR MORE THAN 3 YEARS NOW - ALLIED RESEARCH
At this point, the Covid-19 pandemic seems to be monopolizing all market (as well as all other) discussions across the world and any market insight ...
Tuesday, 31 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.43 PCT - XINHUA
China Taiyuan coal transaction price index stood at 132.17 points Monday, down 0.43 percent week on week.
The index, released by Chi ...
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- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Australian Coal Association
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercuria Energy - Indonesia
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
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