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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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Monday, 18 May 20
TAKING ADVANTAGE OF VIRUS DISTRACTION - BALTIC EXCHANGE
As the industry grapples to deal with exceptional Covid-19-related challenges, a deeper threat is coming to the fore. At this time of crisis, more ...
Monday, 18 May 20
THERMAL COAL SPOT PRICE TUMBLES 25 PER CENT, PUTTING PRESSURE ON SOME PRODUCERS - ABC RURAL
The spot price for thermal coal has fallen 25 per cent per cent in the past month with one leading analyst saying it is because of a reduction in d ...
Monday, 18 May 20
CHINA'S COAL OUTPUT UP 1.3 PCT IN JANUARY-APRIL: XINHUA
Output of raw coal in China rose 1.3 percent year on year to 1.15 billion tonnes in the first four months this year, official data showed.
&nbs ...
Sunday, 17 May 20
A 55,000 OPEN ILIGAN FIXING AT $6,500 VIA INDONESIA REDELIVERY INDIA - BALTIC BRIEFING
Capesize
A precipitous fall in the market this week had the Capesize 5TC shedding over 50 per cent in value. A small rebound at the end of the ...
Friday, 15 May 20
CHINA'S COAL CONSUMPTION TO FALL Y/Y IN SECOND QUARTER, IMPROVEMENT EXPECTED IN SECOND HALF - INDUSTRY BODY: REUTERS
China’s coal consumption is expected to decline in the second quarter from a year earlier, but will see an improvement in the second half of ...
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- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Kapuas Tunggal Persada - Indonesia
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