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Thursday, 14 May 20
OPEC REVISES DOWN GLOBAL OIL DEMAND FORECAST AGAIN
 Crude Oil Price Movements
Crude oil prices recorded a second sharp monthly drop in April, amid an increasing oil surplus in the spot market. The OPEC Reference Basket (ORB) value plummeted by $16.26, or 48.0%, m-o-m, to $17.66/b, the lowest monthly level since December 2001. With regard to crude futures, ICE Brent declined by $7.10, or 21%, to average $26.63/b, while NYMEX WTI fell by $13.75, or 45.2%, to average $16.70/b. The contango structure of the forward curves of all crude futures benchmarks steepened further, on further worsening of global oil market fundamentals and a rapid increase in global oil inventories. Money managers firmly raised their combined futures and options net long positions in April in both ICE Brent and NYMEX WTI contracts.
World Economy
The world economy is forecast to face a recession in 2020, declining by 3.4%, following global economic growth of 2.9% in the previous year. Within the OECD, the US is forecast to contract by 5.2% in 2020, following growth of 2.3% in 2019. An even larger decline is expected in the Euro-zone, where economic activity is forecast to fall by 8.0% in 2020, compared to growth of 1.2% in 2019. Japan is forecast to contract by 5.1% in 2020, comparing to growth of 0.7% in 2019. China’s 2020 GDP is forecast to grow by 1.3%, recovering from a sharp contraction in 1Q20, and following growth of 6.1% in 2019. India is forecast to decline by 0.2%, a sharp slowdown from already weakening growth of 5.3% in 2019. Brazil’s economy is forecast to contract by 6.0% in 2020, following growth of 1.1% in 2019. Russia’s economy is forecast to contract by 4.5% in 2020, after growth of 1.3% in 2019, not only due to COVID-19, but also because of the considerable decline in oil prices.
World Oil Demand
For 2019, world oil demand growth is kept broadly unchanged compared to last month’s assessment, estimated to have grown by 0.83 mb/d, y-o-y, to average 98.72 mb/d. In 2020, world oil demand growth is adjusted lower by 2.23 mb/d and is now forecast to drop by 9.07 mb/d. However, the worst contraction in major oil demand centers around the world is expected to take place in the 2Q20, mostly in OECD Americas and Europe, with transportation and industrial fuels affected the most. As such, OECD oil demand is now revised lower by 1.20 mb/d while non-OECD oil demand growth was adjusted down by 1.03 mb/d, for total oil demand to reach 90.59 mb/d. Indeed, demand contraction in 2020 can be mitigated with sooner than expected easing of government COVID-19 related measures, and faster response of economic growth to the implemented extraordinary stimulus packages.
World Oil Supply
The non-OPEC oil supply growth estimate in 2019 is now revised up slightly by 0.04 mb/d from the previous month’s assessment, due to an upward revision in Australia’s production data, and is estimated to have grown by 2.02 mb/d. For 2020, non-OPEC oil supply is revised down further by almost 2.0 mb/d from the previous projection, and is now forecast to decline by 3.5 mb/d. The main revisions of the month are based on production shut-ins or curtailment plans announced by oil companies – including the majors – particularly in North America. Globally, not including the countries participating in the Declaration of Cooperation (DoC) and as of 6 May 2020, around 3.6 mb/d of production cuts have been announced, so far, in response to the lack of demand, low oil prices, excess supply and limited storage capacity. The 2020 oil supply growth forecast for the US is revised down by 1.3 mb/d to now show a decline of 1.4 mb/d y-o-y. Other large downward revisions are undertaken for Canada and Brazil by 0.3 mb/d and 0.1 mb/d, respectively. Oil supply in 2020 is forecast to show growth only in Norway, Brazil, Guyana and Australia. OPEC NGLs production in 2019 is estimated to have grown by 0.04 mb/d to average 4.79 mb/d and for 2020 is forecast to grow by 0.04 mb/d to average 4.83 mb/d. In April, OPEC crude oil production increased by 1.80 mb/d m-o-m to average 30.41 mb/d, according to secondary sources
Product Markets and Refining
Operations Refinery margins in the Atlantic Basin rebounded in April. Deeper refinery intake cuts as well as low feedstock prices helped offset weak demand. In addition, the relaxation of confinement measures in the US and Europe amid the onset of the driving season, provided much-needed stimulus to the top of the barrel. In Asia, however, stronger product availability, as refineries increased processing rates, outpaced product inventory drawdowns amid a lack of demand from overseas, weighed on the regional product market.
Tanker Market
April was a stellar month for the tanker market with both dirty and clean rates seeing spikes during the month. Dirty freight rates peaked early in April and then trended lower, although remaining at relatively high levels. Rates were supported by a surge in tanker demand, driven by low crude prices and a need to push out excess supplies amid concerns about the availability of onshore storage capacity. Meanwhile, clean tanker rates jumped to historic highs in the middle of April, as refiners and traders looked to boosting product exports and turned to floating storage. However, rates returned to more typical levels by the end of the month. The expected voluntary and involuntary production reductions are expected to weigh on tanker demand in the coming months, although increased floating storage will provided offsetting support.
Crude and Refined Products Trade
According to preliminary data, US crude imports in April fell to 5.4 mb/d – the lowest since 1992 – while the country’s crude exports averaged 3.2 mb/d, down from a peak of 3.7 mb/d in February 2020. In March, China’s crude imports averaged 9.7 mb/d, falling below 10 mb/d for the first time in eight months. Product exports from China surged to 1.85 mb/d, the second highest level on record, led by a jump in diesel exports. India’s crude imports dipped in March to average 4.6 mb/d, impacted by the government-ordered lockdown which began toward the end of the month. India’s product exports rose 10% m-o-m, supported by an increase in diesel exports. Crude imports into Japan increased for the first time in two months, averaging 3.1 mb/d in March, while product imports and exports were slightly lower. The latest official data for OECD Europe shows crude exports continuing to fall in January, reaching 2.2 mb/d.
Commercial Stock Movements
OECD commercial oil stocks rose by 57.7 mb m-o-m in March to stand at 3,002 mb. This was 125.8 mb higher than the same time one year ago and 88.6 mb above the latest five-year average. Within components, crude stocks surged by 49.1 mb, while product stocks rose by 8.6 mb, m-o-m. In terms of days of forward cover, OECD commercial stocks surged by 8.9 days m-o-m in March to stand at 86.1 days. This was 25.1 days above March 2019, and 23.8 days above the latest five-year average. Preliminary data for April showed that US total commercial oil stocks surged by 81.1 mb m-o-m to stand at 1,395 mb. This was 136.1 mb, or 10.8%, above the same period a year ago, and 123.7 mb, or 9.7%, higher than the latest five-year average. Within components, crude stocks climbed by 47.9 mb, and product stocks rose by 33.2 mb m-o-m in April. Balance of
Supply and Demand
Demand for OPEC crude in 2019 stood at 29.8 mb/d, 1.2 mb/d lower than the 2018 level. For 2020, and following the recent agreement reached at the extraordinary OPEC and non-OPEC Ministerial Meetings in April, demand for OPEC crude is expected at 24.3 mb/d, which is 5.6 mb/d lower than the 2019 level. It is worth noting that demand for OPEC crude in 2020 remained almost the same as last month’s assessment, both considering the voluntary adjustment volumes under the Declaration of Cooperation (DoC) framework. However, additional reductions recently announced by several OPEC member countries, above and beyond their voluntary commitments under DoC, are expected to expedite market re-balancing, and improve the demand for OPEC crude in 2020.
Source: OPEC
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Wednesday, 17 June 20
MARKET INSIGHT - INTERMODAL
After experiencing record earnings during the first half of the year, the focus of headlines concerning the tanker market has shifted from the deve ...
Wednesday, 17 June 20
KOREA SOUTHERN POWER CO INVITED 80000 MT OF LOW CALORIFIC VALUE COAL FOR AUGUST 1H, 2020 LOADING
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 Metric Tons (MT) Min 4,200 kcal/kg - Max. ...
Tuesday, 16 June 20
A GLOBAL ECONOMIC SLUMP: WHAT WILL IT MEAN FOR METALS AND MINING? - WOOD MACKENZIE
Back before coronavirus knocked “normal” out cold, the key issues for miners were sub-investment prices, rising requirements for ESG an ...
Tuesday, 16 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.58 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.43 points Monday, up 0.58 percent week on week.
The index, released by China ...
Tuesday, 16 June 20
HIGHER IRON ORE PRICES OFFSET CORONAVIRUS-DRIVEN PRODUCTION RISK - FITCH RATINGS
Lower iron ore production in Brazil, resulting from rising coronavirus infections, should only marginally affect the cash flow of Vale and other gl ...
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- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Bhatia International Limited - India
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
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