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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, 27 March 20
CHINA'S BULKS: THE SENTIMENT GAP BETWEEN STEEL AND COAL WIDENS - WOOD MACKENZIE
China seems to be containing its local coronavirus situation, with imported cases now posing the greater threat. While quarantine measures remain t ...
Friday, 27 March 20
S.KOREA Q1 THERMAL COAL IMPORTS SET FOR 10-YR LOW ON ANTI-POLLUTION MEASURES - REUTERS
South Korea’s first-quarter thermal coal imports are set to fall to a decade-low due to stricter air pollution measures, while the coronaviru ...
Friday, 27 March 20
PORT OF NEWCASTLE OPERATIONS CONTINUE WITH COVID-19 RESPONSE MEASURES IN PLACE
Port of Newcastle, like many organisations, is taking a precautionary approach to help manage COVID-19 risks in the community. Our focus is on ensu ...
Thursday, 26 March 20
CHINA'S BENCHMARK POWER COAL PRICE DROPS SLIGHTLY - XINHUA
China’s benchmark power coal price dropped slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...
Wednesday, 25 March 20
CORONAVIRUS CRISIS IS CRUSHING GLOBAL GDP GROWTH - FITCH RATINGS
The coronavirus crisis is crushing global GDP growth according to Fitch Ratings in its latest quarterly “Global Economic Outlook” (GEO) ...
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- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- GMR Energy Limited - India
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- The University of Queensland
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Cement Manufacturers Association - India
- Parliament of New Zealand
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