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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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Friday, 08 May 20
THE COLLAPSE OF THE OIL AND BUNKER FUEL MARKETS IN EARLY 2020 - PETER SAND
The sulphur regulation from the International Maritime Organization (IMO) that came into force on 1 January 2020 took the centre stage in the shipp ...
Friday, 08 May 20
LNG DEMAND FACED SEVERAL HEADWINDS IN THE FIRST QUARTER OF 2020 - GASLOG
LNG demand faced several headwinds in the first quarter of 2020 including a warmer than average winter in the northern hemisphere, high inventory l ...
Thursday, 07 May 20
IEEFA UPDATE: THE OUTLOOK FOR THERMAL COAL IN SOUTHEAST ASIA AND SOUTH ASIA
Seven headwinds are building to sustained growth in coal in Asia
The medium term outlook for thermal coal in Southeast Asia is posit ...
Thursday, 07 May 20
IMO 2020: BUNKER CLAIMS HANDLING GUIDE FOR A NEW DECADE - THE STANDARD CLUB
KNOWLEDGE TO ELEVATE
IMO 2020 is the term generally used to describe the following regulations under Annex VI of the International Convention ...
Thursday, 07 May 20
CRUDE OIL TANKER EARNINGS DROP 68% IN NINE DAYS - BIMCO
Crude oil tanker earnings have come down sharply in recent weeks with Very Large Crude Carrier (VLCC) earnings from the Middle East Gulf to China d ...
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- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Australian Coal Association
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- The University of Queensland
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Planning Commission, India
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
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