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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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Wednesday, 01 July 20
COLOMBIA'S COAL EXPORT VOLUMES HAVE STEADILY DECLINED IN RECENT YEARS - BANCHERO COSTA
Colombia is the world’s fifth largest seaborne exporter of coal, coming after Australia, Indonesia, Russia and the USA.
Export ...
Wednesday, 01 July 20
MARKET INSIGHT - INTERMODAL
It was beginning of 2020 – close to 6 months from now – when we first experienced the huge impact of the COVID 19 outbreak on Ship Repa ...
Monday, 29 June 20
INDONESIAN COAL AT THE MERCY OF THE DRAGON AND TIGER - GHEE PEH | IEEFA
Coal sector analysts have been busy in recent months mapping the negative impact of low coal prices from the COVID-19 pandemic on Indonesian coal c ...
Monday, 29 June 20
FALLING DEMAND IN CHINA AND INDIA SIGNAL TOUGH TIMES AHEAD FOR INDONESIAN EXPORTS - GHEE PEH | EEFA
Assessing the Impact on Indonesian Coal Companies
The bad news for Indonesia’s coal companies is that they are likely to have ...
Monday, 29 June 20
INDIA COAL IMPORT OUTLOOK: WEAK DEMAND, IMPORT SUBSTITUTION, EXPECT 20% YOY DECLINE - GHEE PEH | IEEFA
For India, the coal demand indicators have clearly turned negative.
According to Argus Media, since the government declared a ...
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- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- The University of Queensland
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
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