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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, 01 April 20
TRADERS SCRAMBLE TO SELL CHEAP CRUDE CARGOES AS GLUT GROWS - REUTERS
Oil traders across the globe are offering cargoes far in advance as rapidly vanishing demand drives key physical crude prices to multi-decade lows, ...
Wednesday, 01 April 20
MARKET INSIGHT - INTERMODAL
There is an old, allegedly Chinese, saying suggesting that living in “interesting” times usually refers to times of trouble. The latest ...
Tuesday, 31 March 20
FREIGHT MARKET: DRY BULKERS - SPOT MARKET 23-29 MARCH 2020
Capesize
The rebound in freight rates resumed this past week, with rates man-aging to post further gains by week’s end. The BCI is in negat ...
Tuesday, 31 March 20
DRY BULK: Q1 HAS BEEN THE WORST QUARTER NOTED FOR MORE THAN 3 YEARS NOW - ALLIED RESEARCH
At this point, the Covid-19 pandemic seems to be monopolizing all market (as well as all other) discussions across the world and any market insight ...
Tuesday, 31 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.43 PCT - XINHUA
China Taiyuan coal transaction price index stood at 132.17 points Monday, down 0.43 percent week on week.
The index, released by Chi ...
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- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- Eastern Energy - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- Minerals Council of Australia
- The University of Queensland
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Global Green Power PLC Corporation, Philippines
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- ASAPP Information Group - India
- Bhatia International Limited - India
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- Parliament of New Zealand
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
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