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