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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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Wednesday, 19 October 22
WHAT WILL THE GAS MARKET LOOK LIKE IN A NET ZERO WORLD? - WOOD MACKENZIE
The global gas and LNG market faces a number of ‘great unknowns’. With the market in turmoil uncertainty abounds – from the scale ...
Wednesday, 19 October 22
MARKET INSIGHT - INTERMODAL
The LNG market remains extremely tight, and as a result adding further pressure on the vessel charter market, which is already stretched due to the ...
Sunday, 16 October 22
COULD A RETURN TO SHALE EXPLORATION BE PART OF THE SOLUTION TO EUROPE'S GAS SUPPLY PROBLEM? - WOOD MACKENZIE
The European gas market is in turmoil. Russia’s invasion of Ukraine has shaken things up, triggering a complete rethink of European energy st ...
Thursday, 13 October 22
THERMAL COAL PRICES RETREAT AS WINTER SUPPLY FEARS EASE - REUTERS
The prices of key thermal seaborne coal grades are retreating amid signs that supplies will be sufficient to meet winter demand in both Europe and ...
Thursday, 13 October 22
SPOT COAL BIDDING: CHINESE FIRM WANTS REVISED MECHANISM - BUSINESS RECORDER
Chinese company M/s Huaneng Shandong Ruyi (Pakistan) Energy Limited (HSR) has cautioned National Electric Power Regulatory Authority (Nepra) that i ...
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- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- White Energy Company Limited
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- The University of Queensland
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Manunggal Multi Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Parliament of New Zealand
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
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