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Wednesday, 29 April 20
OIL CLOSES IN ON PEAK OVERSUPPLY - WOOD MACKENZIE
Are we now deep in the abyss? Up to our necks in it, if the oil price is any guide. Brent has now tested sub-US$20/bbl in this downturn and WTI sub-zero, albeit briefly and in somewhat freakish circumstances. Where are the signs of stress across the oil value chain? And what are the prospects of finding an exit route to recovery? I talked it through with Ann-Louise Hittle of our Macro Oils team.
First, oil demand, which we think may be close to bottoming out. Decline has been sharp and deep as Covid-19 takes its toll on global economic activity. Much of the world is currently in lockdown, with more than 65% of the world’s population under travel restrictions. Global air travel and car use have nosedived in many countries. The big hit has been on jet fuel demand (down 50% year-on-year) and gasoline (down 25%). Diesel and fuel oil – used to transport goods by truck, ship and rail – have held relatively steady.
The net effect will be April’s demand falling by an average of 15 million to 18 million b/d year on year, based on the early April forecast from our Macro Oils Service. It’s a big number but may be bigger still on certain days or weeks in April and May. Some estimates have suggested declines of 20 million b/d or more.
A key question is when the global economic recovery that’s needed to kick start oil demand growth again will begin. Right now, we appear to be in limbo. India, France and the UK, among other big economies, have extended lockdowns into May. Italy, Spain, Austria and others have started to ease restrictions while several US states are considering re-opening in May. There are early signs of US gasoline demand stabilising.
China though is the model to watch as it emerges from lockdown. It has already started ratcheting up crude purchases in April to supply a reviving economy.
Second, inventory is building at superfast rates globally. Cushing, Oklahoma, is a microcosm of the wider picture. Oil prices in Texas have incentivised producers to send crude to the Cushing hub; weak demand from refineries in the Mid-West and Gulf Coast have kept it there. Storage tanks are filling up rapidly – the three largest weekly builds on record were in consecutive weeks from late March, based on Genscape’s proprietary twice-weekly tank monitoring.
Cushing’s tightening storage capacity played a central role in WTI’s ignominious dive into negative prices on 20 April, ahead of the May contract expiry. Traders and financial players were effectively ambushed – having to pay counterparties up to US$37/bbl to roll out of their expiring May contracts and into June.
Storage globally will stay tight so long as oversupply persists. Genscape estimates Cushing‘s spare capacity of up to 15 million b/d will be full within weeks, and other landlocked hubs – the Caspian for one – are in a similar position. But in reality, producers everywhere are worried their crude won’t be able to find a home.
Third, the world is still awash with supply, which unlike demand is still close to pre-crisis levels. Low prices have killed off new investment but have not yet had much impact on production. So far, we estimate barely one million b/d of onstream non-OPEC production has been shut in.
These are sizeable volumes but, given the scale of the market oversupply, insignificant. We estimate over 15 million b/d of production generates negative operating cash flow, now that prices have lurched lower. As storage fills up, more wells and fields will be shut-in during the coming weeks. Curtailed volumes will quickly mount up.
What must happen for the oil market to start rebalancing and prices to recover? May is important for supply, with OPEC+ cuts taking effect and removing up to 7 million b/d from the market by the end of the month. We expect a slow return to “normal” life in H2 2020 to help demand recover, though most likely staying below pre-crisis levels.
A strong bounce in demand as the world emerges from recession will be needed to soak up the overhang of inventory, which threatens to reach record levels by summer. Nothing, however, can be taken for granted while coronavirus still poses a threat to economic – and social – activity.
Source: Wood Mackenzie
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Wednesday, 27 May 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.94 PCT - XINHUA
China Taiyuan coal transaction price index stood at 125.03 points Monday, up 0.94 percent week on week.
The index, released by China ...
Monday, 25 May 20
NON-OPEC OIL SUPPLY DEVELOPMENT - OPEC
Non-OPEC oil supply continued to increase by 2.0 mb/d in 2019, driven by US shale production, which rose by 1.7 mb/d, amounting to 84% of total non ...
Sunday, 24 May 20
A 63,000 FIXED DELIVERY VIETNAM TRIP VIA INDONESIA REDELIVERY KOSICHANG AT $8,500 - BALTIC BRIEFING
Capesize
After a week of bounce momentum the market appears to have stalled out once again. The Capesize 5TC has more than doubled since last F ...
Saturday, 23 May 20
COLOMBIA COAL OUTPUT DOWN 7.2% IN Q1 ON LOW PRICES, CORONAVIRUS LOCKDOWN - REUTERS
Coal production in Colombia, the world’s fifth-largest coal exporter, fell 7.2% in the first quarter because of low prices and coronavirus qu ...
Saturday, 23 May 20
EWP INVITES BIDS FOR 840,000 METRIC TONS OF MIN 5700 NAR COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd (EWP) has Issued an International Tender for total Max 840,000 Metric Tons of min 5 ...
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- GN Power Mariveles Coal Plant, Philippines
- Videocon Industries ltd - India
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Parliament of New Zealand
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- Indian Energy Exchange, India
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- Planning Commission, India
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- White Energy Company Limited
- Georgia Ports Authority, United States
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
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