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