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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, 19 December 19
BANGLADESH'S NBR CUTS VAT ON COAL IMPORT FOR POWER PLANTS - THE DAILY STAR
The National Board of Revenue (NBR) reduced value added tax on the import of coal for power plants to 5 percent from present 15 percent for five ye ...
Wednesday, 18 December 19
AVERAGE PRICES OF COAL IN 2018 WERE MORE THAN 60% HIGHER THAN IN 2016 - IEA
Coal use grew again in 2018.
Global coal demand increased by 1.1%, continuing the rebound that began in 2017 after three years of decline ...
Wednesday, 18 December 19
ASIA IS SET TO SUPPORT GLOBAL COAL DEMAND FOR THE NEXT FIVE YEARS - IEA
Press Release: Global coal demand is expected to decline in 2019 but remain broadly stable over the next five years, supported by robust growth in ...
Wednesday, 18 December 19
SHIPPING MARKET INSIGHT - INTERMODAL
As we all know very well by now, the reduction in the maximum allowable sulphur content of marine fuels in 2020 is likely to have a massive impact ...
Tuesday, 17 December 19
AUSTRALIA ENERGY MARKET OPERATOR TURNS SCROOGE ON COAL LOBBY: RUSSELL
Australia, which vies with Indonesia for the title of the world’s largest coal exporter, is planning for an electricity future where use of t ...
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- Ministry of Mines - Canada
- Planning Commission, India
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- Georgia Ports Authority, United States
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- Parliament of New Zealand
- Wilmar Investment Holdings
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Posco Energy - South Korea
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- The University of Queensland
- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- White Energy Company Limited
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
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