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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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Thursday, 23 January 20
COAL-BASED ELECTRICITY GENERATION SURGES 95% IN 2019 - PROFIT PAKISTAN TODAY
Coal-based power generation jumped 94.5 percent to 2,030 Gigawatt hours (GWh) in the year to November 2019, taking its share in the country’s ...
Wednesday, 22 January 20
INDIA: COAL PRODUCTION FROM CAPTIVE MINES RAISES 24% OUTPUT IN APRIL TO DECEMBER - FINANCIAL EXPRESS
Coal production from captive mines in the first nine months of the ongoing financial year was up 24% year-on-year (y-o-y) at 40.93 million tonne (M ...
Wednesday, 22 January 20
SHIPPING MARKET INSIGHT - INTERMODAL
It seems that we are finally seeing whitish smoke as far as the trade feud between the US and China is concerned, while following this much anticip ...
Tuesday, 21 January 20
IRON ORE - 5 THINGS TO WATCH IN 2020 - WOOD MACKENZIE
Wood Mackenzie identifies five trends that will impact the iron ore industry.
Slower demand growth (especially in China) and a decen ...
Tuesday, 21 January 20
ASIA'S APPETITE FOR COAL GROWS, WITH CHINA THE KEY DECIDER - NIKKEI
Although renewable power generation is expected to rise significantly in Asia, India’s vast electricity needs will still underpin global dema ...
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- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- The University of Queensland
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Economic Council, Georgia
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Sakthi Sugars Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- Planning Commission, India
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
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