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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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Tuesday, 17 December 19
BACK TO FUTURE FOR BUSH AS AUSTRALIA CONSIDERS MOVING AWAY FROM COAL NEWCASTLE - HERALD
Looking backwards could show the way forward for regional communities planning for a future beyond mining.
One of Australia’s ...
Tuesday, 17 December 19
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.01 PCT - XINHUA
China Taiyuan coal transaction price index stood at 133.16 points, down 0.01 percent week on week.
The index, released by China Taiy ...
Tuesday, 17 December 19
YEAR 2019: IT IS LOOKING SET THAT THIS YEAR WILL BE ONE OF THE SLOWEST IN TERMS OF DRY BULK NEWBUILDING ACTIVITY - ALLIED
With just two weeks remaining before 2019 comes to an end, it is now looking set that this year will be one of the slowest in terms of dry bulk new ...
Monday, 16 December 19
ULTRAMAX: A 63,000DWT SHIP FIXING DELIVERY FOR A SINGAPORE TRIP VIA INDONESIA, FOR RE-DELIVERY TO CHINA AT $11,000 - BALTIC BRIEFING
Capesize
It was one-way traffic for the Capesize market this past week, with all routes giving up value. While downward momentum may have slowe ...
Monday, 16 December 19
THE OUTLOOK FOR U.S. THERMAL COAL IS INCREASINGLY STRESSED - MOODY'S
- Slowing global economic growth, trade tensions will continue to exert influence
- Coal's secular decline will persist in 2020
...
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- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- The University of Queensland
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- Parliament of New Zealand
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
- White Energy Company Limited
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Planning Commission, India
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- GMR Energy Limited - India
- VISA Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
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