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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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Wednesday, 12 February 20
MARKET INSIGHT - INTERMODAL
The recent Coronavirus outbreak in China has led to a global health emergency by World Health Organization and it is yet to be seen how long the ph ...
Wednesday, 12 February 20
CHANGES IN LNG MARKET COULD UNDERCUT PLANS FOR NEW JAPANESE COAL PLANTS - CLYDE RUSSELL
Reuters: Clyde Russell
The collapse in the spot price of liquefied natural gas (LNG) in Asia is a short-term phenomenon that may wel ...
Wednesday, 12 February 20
THE SHIPPING INDUSTRY SEES FREIGHT MARKETS IN A COMPLETE STATE OF COLLAPSE AS DEMAND GETS PARALYZED DUE TO CORONAVIRUS OUTBREAK - ALLIED
With China and the world still trying to contain the effects and come to terms with the Wuhan novel coronavirus outbreak, the shipping industry see ...
Wednesday, 12 February 20
WORLD STEEL PRODUCTION IN 2019 - BANCHERO COSTA
In a worrying development, global steel production slowed down considerably in the fourth quarter of 2019. In the final 3 months of 2019, total cru ...
Sunday, 09 February 20
SUPRAMAX: THE ASIAN ARENA STRUGGLED, A 50,000DWT SHIP FIXING A COAL RUN FROM EAST KALIMANTAN TO INDIA AT $2,000 - THE BALTIC BRIEFING
Capesize
The Capesize market endured another dreadful week of calamitous rate level falls, as the usual season low Q1 period combined with rece ...
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Showing 1141 to 1145 news of total 6871 |
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- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- Minerals Council of Australia
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
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