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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, 01 May 20
LUKOIL SHARES LUBRICANT EXPERIENCE AFTER FIRST 100 DAYS OF OPERATION ON VLSFO
KNOWLEDGE TO ELEVATE
After 100 days of VLSFO operation, LUKOIL Marine Lubricants is sharing recent experience on VLSFO operation with NAVIGO M ...
Wednesday, 29 April 20
OIL CLOSES IN ON PEAK OVERSUPPLY - WOOD MACKENZIE
Are we now deep in the abyss? Up to our necks in it, if the oil price is any guide. Brent has now tested sub-US$20/bbl in this downturn and WTI sub ...
Monday, 27 April 20
INCIDENT INVESTIGATION: SEARCH FOR THE CAUSE, NOT THE VILLAIN - GARD
Incident investigations often conclude with placing the blame for an incident on the crew. Causes of the incidents are usually identified as proced ...
Monday, 27 April 20
A 58,000DWT VESSEL WAS FIXED DELIVERY SINGAPORE TRIP VIA INDONESIA, RE-DELIVERY WC INDIA, AT $4,500 - BALTIC BRIEFING
Capesize
The tide turned this week for the Capesize market, as voyage rates registered dramatically falling fuel costs. This was led primarily ...
Sunday, 26 April 20
STRONGER BUNKER PRICES FAIL TO RALLY FREIGHT MARKET - FIS
VLSFO bunker prices rebounded by $22.50 to $229/mt in the port of Singapore but failed to turn around the spot freight market.
Some ...
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- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- San Jose City I Power Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- The University of Queensland
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Tata Chemicals Ltd - India
- Meralco Power Generation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Mintek Dendrill Indonesia
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- Anglo American - United Kingdom
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
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