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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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- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sical Logistics Limited - India
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Central Java Power - Indonesia
- White Energy Company Limited
- Parliament of New Zealand
- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
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