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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, 06 May 20
COST CHALLENGES IN A US$20/BBL WORLD - WOOD MACKENZIE
A new approach is needed to ensure supply sector resilience
How will US$20/bbl affect the oil and gas supply chain?
It’s going to g ...
Wednesday, 06 May 20
MARKET INSIGHT - INTERMODAL
It comes as no surprise that activity in the dry bulk SnP market remains soft, with asset values caught in the downward spiral generated by the Cov ...
Wednesday, 06 May 20
FLOATING STORAGE OF OIL CARGOES - STANDARD CLUB
KNOWLEDGE TO ELEVATE
Due to a combination of circumstances there is now a worldwide shortage of storage space ashore for both unrefi ...
Wednesday, 06 May 20
IRON ORE TRADE REMAINS REMARKABLY RESILIENT THIS YEAR, AT LEAST IN ASIA - BANCHERO COSTA
Iron ore trade remains remarkably resilient this year, at least in Asia, despite the global economic impact from COVID-19. In the first 4 months of ...
Tuesday, 05 May 20
SUPRAMAXES: YTD SLIDE HAS BEEN 45%, WITH THE AVERAGE FOR 2020 TCA HOLDING AT US$5,793 - ALLIED
It has been almost three months since the WHO officially categorized the current coronavirus outbreak as a global pandemic, an outbreak that has br ...
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- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- New Zealand Coal & Carbon
- PTC India Limited - India
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Minerals Council of Australia
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Sinarmas Energy and Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
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