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Thursday, 13 October 22
OPEC DOWNGRADES CRUDE OIL DEMAND, AS WORLD ECONOMY ENTERS SLOWDOWN
 Crude Oil Price Movements
The OPEC Reference Basket (ORB) declined m-o-m by $6.58 in September, or 6.5%, to average $95.32/b. Pressure from equity market selling, central bank interest rate hikes, and economic outlook concerns weighed on crude futures prices. The ICE Brent front-month declined $7.17, or 7.3%, to average $90.57/b in September while NYMEX WTI fell by $7.68, or 8.4%, to average $83.80/b. The Brent/WTI futures spread widened again m-o-m, expanding 51¢ to average $6.77/b. The market structure of all three major crude benchmarks remained in backwardation. Hedge funds and other money managers resumed selling in both major futures contracts — ICE Brent and NYMEX WTI — especially during the last week of September.
World Economy
Global economic growth has entered into a period of significant uncertainty and deteriorating macroeconomic conditions, amid intensifying challenges including high inflation levels, tightening monetary policies by major central banks, rising interest rates and persisting supply chain issues. Moreover, geopolitical risks, extensions of COVID-19 related lockdowns and flare ups of the pandemic in the Northern Hemisphere during winter season remain uncertain. By taking these factors into account, the global economic growth forecast for both 2022 and 2023 are revised down to stand at 2.7% and 2.5%, respectively. For the US, GDP growth for 2022 is revised down to 1.5% and for 2023 it is lowered to 0.8%. In the Euro-zone, the 2022 GDP forecast is lowered to 3.0%, and for 2023 it is lowered to 0.3%. Japan’s economic growth forecast for 2022 is revised up to 1.5% while for 2023 it is revised down to 1.0%. China’s 2022 forecast is revised down to 3.1 % while for 2023 it stands at 4.8%. India’s 2022 forecast is revised down for both 2022 and 2023 to 6.5% and 5.6%, respectively. Brazil’s growth forecast for 2022 is unchanged at 1.5% while for 2023 it is revised down to 1.0%. Russia’s 2022 forecast is revised up to show a contraction of 5.7%, with growth of 0.2% expected in 2023. Downside risks to this forecast includes continued inflationary trends, further monetary actions by major central banks, aggravated geopolitical tensions, worsening of the pandemic in the northern hemisphere during winter months, tightening labour markets and further supply chain constraints. These ongoing risks and challenges, especially the economic dynamics in 4Q22 and 1Q23 will require close monitoring.
World Oil Demand
Global oil demand growth in 2022 is revised down by 0.5 mb/d to reflect the recent macroeconomic trends and oil demand developments in various regions. These developments include the extension of China’s zero-COVID-19 restrictions in some regions, economic challenges in OECD Europe, and inflationary pressures in other key economies, which have weighed on oil demand, especially in 2H22. With this, global oil demand for 2022 is now expected to grow by about 2.6 mb/d. In the OECD, oil demand growth is estimated at about 1.4 mb/d with the non-OECD at about 1.3 mb/d. For 2023, world oil demand growth is revised down to stand at about 2.3 mb/d. The OECD is projected to grow by about 0.4 mb/d, and the non-OECD by about 2.0 mb/d.
World Oil Supply
Non-OPEC liquids supply growth in 2022 is forecast at 1.9 mb/d. Upward revisions in Latin America were more than offset by downward revisions to Other Eurasia, OECD Europe and Other Asia. The main drivers of liquids supply growth for 2022 are expected to be the US, Canada, China, Guyana and Brazil, while production is expected to decline mainly in Norway and Thailand. For 2023, the non-OPEC liquids production growth forecast is adjusted down to 1.5 mb/d. The main drivers for 2023 growth are expected to be the US, Norway, Brazil, Canada, Kazakhstan and Guyana, with oil production declines mainly seen coming from Russia and Mexico. Uncertainty about the geopolitical situation remains high, and there is potential for further US shale liquid production. OPEC NGLs and non-conventional liquids in 2022 are forecast to grow by 0.1 mb/d and then by 50 tb/d in 2023 to average 5.4 mb/d. OPEC-13 crude oil production in September increased by 146 tb/d mo-m to average 29.77 mb/d, according to available secondary sources.
Product Markets and Refining Operations
Refinery margins showed diverging trends in September. In the Atlantic Basin, margins increased as the start of peak refinery maintenance season led to a reduction in product output, exerting pressure on product balances, particularly gasoil. This provided solid support to products markets in both the US Gulf Coast and Northwest Europe, mainly for middle distillates. Meanwhile, refinery margins suffered losses in Asia, pressured by the recent release of China’s fourth batch of export quotas as it set the stage for stronger product exports in the near term. In addition, expectations of a fifth batch of export quotas exacerbated bearish product market sentiment within the region, leading ultimately to a downturn in Asian product performance all across the barrel, with the exception of naphtha, which continued to gain favour as the preferred petrochemical feedstock given high natural gas prices. In September, global refinery processing rates declined in line with historical trends, down by 1.2 mb/d in response to a rise in offline capacity amid the start of autumn maintenance season. Preliminary data points to refinery intakes declining further in the coming months by nearly 900 tb/d.
Tanker Market
Very Large Crude Carrier (VLCC) rates continued to gather strength in September, with gains seen on all major routes, supported increased demand on longer haul routes. Spot VLCCs rates on the Middle East-to-East route rose 26%, while on the West Africa-to-East route they gained 23%. Suezmax and Aframax rates fell from the elevated levels seen since March, as the refinery maintenance season kicked off. Suezmax rates on the US Gulf Coast-to-Europe route declined by 7%, while Aframax spot rates on the Mediterranean routes lossed 13%. Clean rates saw diverging trends, with gains East of Suez and declines West of Suez.
Crude and Refined Products Trade
Preliminary data showed that the US crude imports to average 6.3 mb/d in September, while exports reached a record high of 4.0 mb/d. China’s crude imports averaged 9.5 mb/d. The increase came amid expectations for a pickup in domestic product demand in 4Q22 and as the potential for product exports increased. India’s crude imports fell to 4.1 mb/d in August, following strong performance seen over the last four months, but remained broadly in line with seasonal levels. India’s product exports increased, driven primarily by higher outflows of jet fuel and gasoil, despite the government imposing higher export duties. Japan’s crude imports showed strong performance in August, averaging just under 3.0 mb/d, the strongest figure since March 2020, supported by summer demand for gasoline and heathy fuel oil consumption for power generation. Preliminary figures show crude imports into the OECD Europe region remaining high compared with last year, despite steady m-o-m declines in seaborne Russian imports.
Commercial Stock Movements
Preliminary August data shows total OECD commercial oil stocks up 7.8 mb, m-o-m. At 2,712 mb, inventories were 111 mb less than the same month a year ago, 267 mb lower than the latest five-year average, and 273 mb below the 2015–2019 average. Within components, crude and product stocks rose 6.8 mb and 1.0 mb, respectively, compared with the previous month. At 1,315 mb, OECD crude stocks were 0.7 mb lower than the same month last year, 105 mb below the latest five-year average and 133 mb lower than the 2015–2019 average. OECD product stocks stood at 1,398 mb, representing a m-o-m deficit of 110 mb, 162 mb lower than the latest five-year average and 140 mb below the 2015–2019 average. In terms of days of forward cover, OECD commercial stocks rose by 0.2 days m-o-m in August to stand at 59.3 days. This is 1.3 days below August 2021 levels, 5.0 days less than the latest five-year average and 3.8 days lower than the 2015–2019 average.
Balance of Supply and Demand
Demand for OPEC crude in 2022 is revised down by 0.2 mb/d from the last month’s assessment to stand at 28.7 mb/d. This is around 0.6 mb/d higher than in 2021. Demand for OPEC crude in 2023 is revised down by 0.3 mb/d from the last month’s assessment to stand at 29.4 mb/d. This is around 0.8 mb/d higher than in 2022.
Source: OPEC
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Tuesday, 29 November 22
SEABORNE COAL FLOWS IN 2022 - SIGNAL
This year is crucial for the energy mix in European countries, as the EU has imposed new sanctions on Russia. It is important to emphasize that the ...
Friday, 25 November 22
APAC THERMAL COAL PRICES CORRECT FROM RECORD HIGH - FITCH RATINGS
Prices of Newcastle 6,000kcal/kg coal have corrected following falling European gas and coal prices, and more supply from Australia could help miti ...
Thursday, 24 November 22
VIETNAM BOOSTS COAL USE PLAN FOR 2030 AS G7 CLIMATE OFFER STALLS - REUTERS
Vietnam has increased its coal power target for 2030 under a revised draft energy plan, government documents seen by Reuters show, while renewables ...
Tuesday, 22 November 22
THE GENCON 2022 CHARTERPARTY - GARD
KNOWLEDGE TO ELEVATE
BIMCO has published a revamped version of the popular GENCON charterparty. Our author, Helena Biggs, was a member of the ...
Tuesday, 22 November 22
INDIA POWER BINGES ON COAL, OUTPACES ASIA - REUTERS
India’s coal-fired power output has increased much faster than any other country in the Asia Pacific since Russia’s invasion of Ukraine ...
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- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Anglo American - United Kingdom
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Georgia Ports Authority, United States
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
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