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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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Tuesday, 07 April 20
COAL INDIA'S DISPATCHES DROP, OUTPUT INCREASES - THE HINDU
India’s largest coal producer Coal India Ltd. (CIL) has seen a 10% fall in dispatches in March 2020 due to a sharp fall in demand from the po ...
Tuesday, 07 April 20
CORONAVIRUS AND LOCKDOWNS DRAG DOWN THE INDONESIAN COAL PRICE REFERENCE IN APRIL
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of the Indonesian ther ...
Monday, 06 April 20
A 52,000DWT SHIP FIXING DELIVERY SINGAPORE TRIP, VIA INDONESIA, REDELIVERY TAIWAN, AT $3,100 - BALTIC BRIEFING
Capesize
The Capesize market this past week looks to have come off life support and found some improved sentiment. The week began rather ordina ...
Monday, 06 April 20
INDIA'S 21-DAY LOCKDOWN - IMPACT ON COMMODITIES? - WOOD MACKENZIE
India is under a three-week lockdown from 25 March, to contain the spread of the coronavirus outbreak. Wood Mackenzie analysts discuss what this me ...
Friday, 03 April 20
CHINA'S BENCHMARK POWER COAL PRICE DROPS SLIGHTLY - XINHUA
China’s benchmark power coal price dropped slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...
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- Coastal Gujarat Power Limited - India
- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- The University of Queensland
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- Sical Logistics Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
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