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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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Saturday, 25 April 20
KOREA SOUTH-EAST POWER CO. INVITED BIDS FOR 780K - 900K MT OF 5600 NCV COAL FOR JULY TO OCTOBER 2020 LOADING
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 780,000~900,000 Metric Tons (MT) s ...
Saturday, 25 April 20
SEAFARER MENTAL WELLBEING DURING THE COVID-19 PANDEMIC - STANDARD CLUB
KNOWLEDGE TO ELEVATE
COVID-19 has forced many parts of the world to enforce a lockdown in a bid to flatten the curve in terms of transmissions ...
Friday, 24 April 20
KOMIPO INVITED BIDS FOR 5700 NAR COAL FOR JUNE & JULY LOADING
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) Has Issued An International Tender For 260,000 Metric Tons (MT) Steam Coal ...
Friday, 24 April 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 24 April 20
COAL INDIA TO PRODUCE 710 MT COAL - MINISTER OF COAL AND MINES
Coal India Limited (CIL) will produce 710 million tonnes (MT) of coal and company’s coal off take target will also remain at710 MT for this f ...
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- Anglo American - United Kingdom
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- White Energy Company Limited
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Deloitte Consulting - India
- Ministry of Mines - Canada
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Economic Council, Georgia
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
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