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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, 27 March 20
CHINA'S BULKS: THE SENTIMENT GAP BETWEEN STEEL AND COAL WIDENS - WOOD MACKENZIE
China seems to be containing its local coronavirus situation, with imported cases now posing the greater threat. While quarantine measures remain t ...
Friday, 27 March 20
S.KOREA Q1 THERMAL COAL IMPORTS SET FOR 10-YR LOW ON ANTI-POLLUTION MEASURES - REUTERS
South Korea’s first-quarter thermal coal imports are set to fall to a decade-low due to stricter air pollution measures, while the coronaviru ...
Friday, 27 March 20
PORT OF NEWCASTLE OPERATIONS CONTINUE WITH COVID-19 RESPONSE MEASURES IN PLACE
Port of Newcastle, like many organisations, is taking a precautionary approach to help manage COVID-19 risks in the community. Our focus is on ensu ...
Thursday, 26 March 20
CHINA'S BENCHMARK POWER COAL PRICE DROPS SLIGHTLY - XINHUA
China’s benchmark power coal price dropped slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...
Wednesday, 25 March 20
CORONAVIRUS CRISIS IS CRUSHING GLOBAL GDP GROWTH - FITCH RATINGS
The coronavirus crisis is crushing global GDP growth according to Fitch Ratings in its latest quarterly “Global Economic Outlook” (GEO) ...
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- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- MS Steel International - UAE
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- White Energy Company Limited
- India Bulls Power Limited - India
- Australian Coal Association
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Planning Commission, India
- Indika Energy - Indonesia
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Kalimantan Lumbung Energi - Indonesia
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
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