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Saturday, 20 June 20
WORLD OIL DEMAND IS PROJECTED TO DECREASE BY 9.1 MB/D IN 2020 - OPEC
Crude Oil Price Movements
Spot crude oil prices rebounded in May from low levels registered a month earlier, as physical market fundamentals improved significantly. The OPEC Reference Basket (ORB) value rose by $7.51, or 42.5%, m-o-m, to stand at $25.17/b. Crude oil futures prices also bounced back in May, amid renewed optimism on the outlook of global oil market fundamentals and expectations for a further recovery of oil demand and tightening global supply. ICE Brent increased by $5.78, or 21.7%, m-o-m to average $32.41/b, and NYMEX WTI soared by $11.83, or 70.8%, m-o-m to average $28.53/b. The contango structure of oil futures prices flattened considerably over the month in all three markets, suggesting that the supply-demand fundamentals are gradually improving. Hedge funds and other money managers turned more positive about the outlook for crude oil prices and continued to raise their combined futures and options net long positions in both ICE Brent and NYMEX WTI contracts.
World Economy
The world economic growth forecast remains unchanged, declining by 3.4% y-o-y in 2020, following global economic growth of 2.9% in 2019. The major economies’ forecasts remain unchanged this month, except for India. The US is forecast to contract by 5.2% in 2020, following growth of 2.3% in 2019. An even larger decline of 8.0% is expected in the Euro-zone 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%, following growth of 6.1% in 2019. India’s forecast was revised down to decline by 0.8%, a sharp slowdown from downwardly revised growth of 4.9% 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
World oil demand is projected to decrease by 9.1 mb/d in 2020, unchanged from the previous month’s assessment. The COVID-19 pandemic has negatively affected global economic activities, eliminating global oil demand growth potential and leading to a y-o-y decline of 6.4 mb/d in 1Q20 and by 17.3 mb/d y-o-y in 2Q20. Transportation fuels are projected to be under pressure during 2020 as lockdowns in various countries particularly the US, Europe, India and the Middle East reduce demand for gasoline and jet fuel, as air travel and distances travelled anticipated to significantly decline compared with a year earlier. Furthermore, decreased manufacturing activities, compared with the previous year, will limit industrial fuel requirements. Petrochemical feedstock is expected to be driven by slower end-user requirements for plastics and plastic products, compared to previous years. Considering the large uncertainties going forward, new data and developments may warrant further revisions in the near term. For 2019, world oil demand growth is kept unchanged at 0.83 mb/d as OECD oil demand declined by 0.10 mb/d while non-OECD oil demand increased by 0.93 mb/d.
World Oil Supply
Non-OPEC liquids production growth in 2020 (including processing gains) is revised up by 0.3 mb/d from the previous month’s assessment and is now forecast to decline by 3.2 mb/d y-o-y. The revision is based on oil production estimations for April and May in non-OPEC countries participating in Declaration of Cooperation (DoC). Strong conformity with the voluntary production adjustments by the 10 non-OPEC participating countries in the DoC led to a drop in crude oil output of more than 2.59 mb/d in May, while OPEC-10 cut 6.25 mb/d m-o-m. At the same time, preliminary oil production outside the DoC showed a decrease by 2.0 mb/d in April and furthermore by 0.8 mb/d in May, mainly in the US and Canada. Oil supply in 2020 is forecast to show growth only in Norway, Brazil, Guyana and Australia. Non-OPEC liquids production growth in 2019 was revised up by 0.01 mb/d owing to a minor upward revision in Latin America’s production in 4Q19 and is now estimated to have grown by 2.03 mb/d to average 65.03 mb/d for the year. OPEC NGLs are estimated to have declined by 0.08 mb/d y-o-y in 2019 to average 5.26 mb/d, while the preliminary 2020 forecast indicates a decline of 0.03 mb/d to average 5.23 mb/d. OPEC crude oil production in May decreased by 6.30 tb/d m-o-m to average 24.19 mb/d, according to secondary sources.
Product Markets and Refining Operations
Refinery margins globally came under heavy pressure and plummeted to record lows on the back of oil product gluts amid stronger feedstock prices. The middle section of the barrel suffered the most as the manufacturing, freight and distribution systems still operate at reduced rates. Although gasoline markets showed some upside, owing to a gradual recovery in mobility as the pandemic restrictions continue to be eased, this was insufficient to prevent the hard downfall in refining economics.
Tanker Market
Dirty tanker rates in May fell from the high levels seen since mid-March. Production adjustments by OPEC and participating non-OPEC countries, as well as other major producers have eased the pressure seen on demand for VLCCs. A decline in product exports amid COVID-19 lockdowns have also kept clean tanker rates subdued, with both reduced refinery runs and weak product demand limiting cargoes. Floating storage has provided some support to both dirty and clean rates, however, levels are seen to be unwinding faster-than-expected.
Crude and Refined Products Trade
Preliminary data for May shows US crude imports recovering slightly to 6.0 mb/d following the arrival of long-haul volumes from the Middle East. US crude exports remained broadly steady at 3.2 mb/d, although a considerable share was headed to floating storage and oversea inventories. Product exports fell sharply in May, accelerating the decline that started in March, as COVID-19 disruptions constricted product demand in Latin America. After bottoming out at 9.7 mb/d in March, China’s crude imports picked up in April, averaging 9.9 mb/d. Preliminary customs data indicates crude imports hit a new record high of 11.3 mb/d in May. Product exports from China reached a new record high of 2.08 mb/d in April, although tanker tracking data points to a sharp fall in exports in the coming months. India’s crude imports dipped in April to average 4.2 mb/d, impacted by the government-ordered lockdown over the month. India’s product imports experienced a continued decline, weighed down by similar factors, averaging below 1.0 mb/d for the first time this year. India’s product exports edged slightly higher in April, as refiners looked to international markets to drain excessively high inventories.
Commercial Stock Movements
Preliminary April data showed that total OECD commercial oil stocks rose by 107.7 mb m-o-m to stand at 3,069 mb. This is 184 mb higher than the same time one year ago and 140.6 mb above the latest five-year average. Within the components, crude and products stocks rose by 58.1 mb and 49.6 mb m-o-m, respectively. OECD crude stocks stood at 57.9 mb above the latest five-year average, while product stocks exhibited a surplus of 82.6 mb compared to the latest five-year average. In terms of days of forward cover, OECD commercial stocks fell by 4.2 days m-o-m in April to stand at 80.7 days. This is 19.9 days above April 2019, and 18.6 days above the latest five-year average.
Balance of Supply and Demand
Demand for OPEC crude in 2019 is revised down by 0.5 mb/d from the previous assessment, standing at 29.4 mb/d, which is 1.1 mb/d lower than the 2018 level. Demand for OPEC crude in 2020 is also revised down by 0.7 mb/d from the previous month, standing at 23.6 mb/d, which is around 5.8 mb/d lower than in the previous year.
Source: OPEC
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Saturday, 01 August 20
SHIP SHAPE - OUCH: FIS
Thursday afternoon saw a report that US GDP in Q2 shrank by 32.9%. Now this may have beaten expectations, but it’s a bit like saying that you ...
Saturday, 01 August 20
ASIA HOPE FOR LONG-TERM OIL DEMAND - BALTIC BRIEFING
Oil demand in Asia Pacific might be expected to plunge 1.8m barrels per day (bpd) this year, but there are still strong prospects for growth over t ...
Friday, 31 July 20
SHORT-TERM IMPACT ON THE CHEMICAL SHIPPING MARKET IF THE INDIA-CHINA DISPUTE ESCALATES - DREWRY
Due to the India-China dispute, the threat of deteriorating trade relations between the two countries has become real. Meanwhile, we expect freight ...
Friday, 31 July 20
PANAMAX: THE PERIOD MARKET REMAINS QUIET WITH FEW FIXTURES REPORTED - FEARNLEYS
Capesize
After weeks of dropping rates, there are finally some resistance for the Capes. Pacific rounds improving to upper15,000s by the middle ...
Friday, 31 July 20
PANDEMIC SENDING SOUTH AFRICAN COAL INDUSTRY TO EARLIER GRAVE - IEEFA
Could South Africa’s coal export industry, one of the largest in the world, be about to take a severe hit from the coronavirus?
...
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- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Ministry of Mines - Canada
- Eastern Coal Council - USA
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- CNBM International Corporation - China
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining Corp, Philippines
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Jaiprakash Power Ventures ltd
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