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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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- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- The University of Queensland
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- AsiaOL BioFuels Corp., Philippines
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- VISA Power Limited - India
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Bhushan Steel Limited - India
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- CNBM International Corporation - China
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- Australian Coal Association
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
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