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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, 23 August 22
SHIPPING: GLOBAL TAX REFORM - WATSON FARLEY & WILLIAMS
OECD rules designed to implement a global minimum corporate tax rate for very large multinational groups have now been published and are expected t ...
Tuesday, 23 August 22
PARTIES CONCLUDE JOINT R&D AGREEMENT FOR WORLD’S FIRST AMMONIA FLOATING STORAGE AND REGASIFICATION BARGE CONTRIBUTING TO PROMOTING THE EARLY INTRODUCTION OF AMMONIA FUEL - NYK
NYK Line, Nihon Shipyard Co., Ltd. (NSY), ClassNK, and IHI Corporation (IHI) signed a joint research and development agreement for the commercializ ...
Monday, 22 August 22
INDONESIAN GOVERNMENT IMPOSED ON NEW PROGRESSIVE ROYALTIES FOR COAL
Indonesian President Joko Widodo has signed a Government Regulation (Number 26 of 2022) on 15 August 2022 related to the progressive royalty rates ...
Monday, 22 August 22
CHINA'S JULY RUSSIAN COAL IMPORTS HIT 5-YR HIGH AS WEST SHUNS MOSCOW - REUTERS
China’s coal imports from Russia jumped 14% in July from a year earlier to their highest in at least five years, as China bought discounted c ...
Sunday, 21 August 22
COAL-RICH POLAND FACES WINTER OF ENERGY DISCONTENT - DW
Poland uses 10 million tons of coal a year to heat households — a whopping 87% of all coal consumed in EU homes in 2019, according to the War ...
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- ICICI Bank Limited - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Planning Commission, India
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Metalloyd Limited - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bharathi Cement Corporation - India
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Indian Energy Exchange, India
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Rashtriya Ispat Nigam Limited - India
- Minerals Council of Australia
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
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