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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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Monday, 09 March 20
OPEC+ 'NO DEAL' A BLOW TO THE MARKET - WOOD MACKENZIE
Speaking after today’s OPEC+ meeting broke up, Ann-Louise Hittle, vice president, Macro Oils, at Wood Mackenzie, said: “Today’s o ...
Monday, 09 March 20
KOREA EAST-WEST POWER INVITED BIDS FOR 150,000 MT OF MIN 4,400 - MAX 5,499 NAR COAL
COALspot.com: KOREA EAST-WEST POWER CO. LTD. of South Korea has issued an international tender for total 150,000 MT of LCV coal for May – Jun ...
Sunday, 08 March 20
SUPRAMAX: A 55,000DWT VESSEL FIXING DELIVERY FROM EAST KALIMANTAN FOR A TRIP TO VIETNAM AT $9,100 - BALTIC BRIEFING
SUPRAMAX/ULTRAMAX - A 56,000DWT VESSEL FIXED DELIVERY SOUTH CHINA TRIP VIA INDONESIA, REDELIVERY EAST COAST INDIA, IN THE $6,000S
SUPRAMAX/U ...
Friday, 06 March 20
CHINA RESUMES 83.4 PCT COAL PRODUCTION CAPACITY AMID EPIDEMIC - XINHUA
China has resumed 83.4 percent of its coal production capacity amid the fight against the novel coronavirus outbreak, the National Energy Administr ...
Friday, 06 March 20
COLOMBIAN COAL OUTPUT FELL 2% IN 2019 - REUTERS
Coal production in Colombia, the fifth-largest coal exporter in the world, fell 2% to 82.2 million tonnes in 2019 after output at one of the princi ...
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- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- PTC India Limited - India
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- White Energy Company Limited
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- CIMB Investment Bank - Malaysia
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- The Treasury - Australian Government
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Australian Coal Association
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- Minerals Council of Australia
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