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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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Monday, 25 November 19
COAL SUPPLY BY CIL TO POWER SECTOR DROPS OVER 8 PC TO 253 MT IN APRIL-OCTOBER - PTI
Supply of coal by state-owned CIL to the power sector registered a decline of 8.5 per cent to 253 million tonnes in the April-October period of thi ...
Monday, 25 November 19
A 53,000DWT SHIP FIXED AT $9,500 DELIVERY SINGAPORE TRIP, VIA INDONESIA, REDELIVERY VIETNAM - BALTIC BRIEFING
Capesize
After a week of value being eroded on the Capesize market, Friday brought improved sentiment across most of the routes. The 5TC averag ...
Monday, 25 November 19
KOWEPO INVITED 6.79 MILLION TONS OF (SUB)BITUMINOUS STEAM COAL BIDS
COALspot.com: South Korea’s Korea Western Power Co., Ltd. (KOWEPO) has issued an international tender for 6,798,000 tons of coal for 5 years ...
Friday, 22 November 19
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 22 November 19
FORTY PERCENT OF ADARO'S COAL SALES VOLUME IN 9M19 GOES TO THE SOUTHEAST ASIA REGION
PT Adaro Energy Tbk released its consolidated financial statements yesterday, for the nine month period, ending September 30, 2019.
...
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- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Sree Jayajothi Cements Limited - India
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Eastern Coal Council - USA
- Aditya Birla Group - India
- The University of Queensland
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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