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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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Friday, 14 February 20
IS THE US COAL INDUSTRY COMPLETELY BURNED OUT? -FORBES
This is the fourth of a multi-part series on the state of the main sources of energy in the US and how they compare globally. The series will cover ...
Friday, 14 February 20
FITCH RTGS: GLOBAL PORTS VULNERABLE TO CORONAVIRUS - RELATED VOLUME DECLINES
Global ports will see reduced trade volumes as a result of the coronavirus, COVID-19, which would become more severe should Chinese production take ...
Thursday, 13 February 20
INDIA: MAJOR PORTS SHOW MUTED GROWTH IN CARGO AS THERMAL COAL VOLUME SLIDES 15% - BUSINESS STANDARD
A sharp slide of 15 per cent in thermal coal volumes weighed on the performance of major ports during the period of April-January of FY20. The majo ...
Wednesday, 12 February 20
REFINING SET FOR A CHALLENGING 2020 - WOOD MACKENZIE
Downstream isn’t the glamorous end of the oil business. And in Big Oil, it’s typically dwarfed by upstream. Yet having been forced to r ...
Wednesday, 12 February 20
COAL INDIA WILL EXCEED LAST YEAR'S PRODUCTION FIGURES: OFFICIAL - PTI
Despite coal production being hampered at Dipka mines due to prolonged rains, Coal India Ltd will exceed last year’s production figures, a to ...
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- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- The University of Queensland
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Sojitz Corporation - Japan
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- Planning Commission, India
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
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