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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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Thursday, 14 May 20
OPEC REVISES DOWN GLOBAL OIL DEMAND FORECAST AGAIN
Crude Oil Price Movements
Crude oil prices recorded a second sharp monthly drop in April, amid an increasing oil surplus in the spot market. Th ...
Thursday, 14 May 20
NEW COVID-19 GUIDELINES FOCUS ON SAFE INTERFACE BETWEEN SHIP AND SHORE STAFF - GARD
At a time when the COVID-19 pandemic is affecting the global population, it is important that ships’ crew and port workers protect each other ...
Wednesday, 13 May 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.4 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.93 points Monday, down 0.4 percent week on week.
The index, released by Chin ...
Tuesday, 12 May 20
IN THE FIRST 4 MONTHS OF 2020, SOUTH KOREA IMPORTED 46.6 MLN TONNES OF CRUDE OIL BY SEA, A NET DECLINE OF 14.1% YOY - BC
South Korea is certainly one of the countries which has handled better the current Covid-19 crisis. In the first week of May 2020, new cases of ...
Tuesday, 12 May 20
OIL MARKET TURBULENCE PIVOTS FOCUS ON FLOATING STORAGE TECHNICAL NEEDS - LLOYD'S REGISTER
KNOWLEDGE TO ELEVATE
Negative oil prices and off-the-scale volatility in crude markets are positive for floating storage, as the next chapter ...
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- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Ind-Barath Power Infra Limited - India
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- The University of Queensland
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- Ambuja Cements Ltd - India
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Mercuria Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Indogreen Group - Indonesia
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- PTC India Limited - India
- Trasteel International SA, Italy
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
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