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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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Friday, 29 May 20
DRY BULK SHIPPING: NO QUICK RECOVERY FOR THE DRY BULK MARKET AS COVID-19 DIGS DEEPER
The outlook is poor for dry bulk, as the negative demand shock and overcapacity come together to send rates to multi-year lows, even a return to wo ...
Thursday, 28 May 20
COVID-19: A FORCE MAJEURE EVENT? - KYPRIANOU
KNOWLEDGE TO ELEVATE
While seeing the unexpected COVID-19 outbreak expanding worldwide and the first cases being identified in Cyprus, the com ...
Thursday, 28 May 20
OIL DEMAND RECOVERED BY 20% IN MAY AGAINST APRIL: RUSSIAN ENERGY MINISTER - TASS
Oil demand remains at a low level but the demand in May increased by 20% against April, Russian Energy Minister Alexander Novak said, cited by the ...
Thursday, 28 May 20
MARKET INSIGHT - INTERMODAL
Earlier in May, China’s top leaders convened for the annual National People's Congress, following over two months of delays due to the co ...
Wednesday, 27 May 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.94 PCT - XINHUA
China Taiyuan coal transaction price index stood at 125.03 points Monday, up 0.94 percent week on week.
The index, released by China ...
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- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- The University of Queensland
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Eastern Coal Council - USA
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Cement Manufacturers Association - India
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