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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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Saturday, 28 December 19
SUPRAMAX: A 63,000DWT VESSEL, OPEN CIGADING, FIXED A TRIP VIA INDONESIA, REDELIVERY WEST COAST INDIA, AT $8,500 - BALTIC BRIEFING
Capesize
The Capesize market this past week has been attempting to recalibrate itself in consideration of weakening freight levels and increasing ...
Saturday, 28 December 19
CHINESE INDUSTRIAL CITY TO FURTHER CUT COAL CONSUMPTION - XINHUA
Harbin, capital city of Heilongjiang Province in China’s northeastern industrial heartland, is planning to further reduce its coal consumptio ...
Friday, 27 December 19
MISERY LOOMS OVER TOP COAL SHIPPERS AS CHINA TO BUY LESS IN 2020 BLOOMBERG
China isn’t cutting back on consumption of the most-polluting fossil fuel just yet, but it is set to reduce imports.
The world ...
Thursday, 26 December 19
REVIEW OF 2019 AND OUTLOOK FOR 2020 - OPEC
Global economic growth slowed in 2019, impacted by a variety of challenges. Trade issues not only led to reduction in global final consumption but ...
Wednesday, 25 December 19
COVER FOR WAR AND TERRORISM RISKS, AND COVER IN RESPECT OF BIOLOGICAL AND BIO-CHEMICAL WEAPONS - 2020 POLICY YEAR: AMERICAN CLUB
KNOWLEDGE TO ELEVATE
This Circular describes the arrangements which have been made to provide special cover for war and terrorism risks, and c ...
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Showing 1221 to 1225 news of total 6871 |
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- South Luzon Thermal Energy Corporation
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Kapuas Tunggal Persada - Indonesia
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- Planning Commission, India
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- Tamil Nadu electricity Board
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Star Paper Mills Limited - India
- The University of Queensland
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
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