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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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Saturday, 06 August 22
SUMITOMO Q1 PROFIT RISES 45% ON STRONGER PRICES OF COAL, NICKEL - REUTERS
Japanese trading house Sumitomo Corp 8053.T said on Wednesday its net profit for the April-June quarter rose 45% to a record thanks to higher price ...
Saturday, 06 August 22
GERMANY'S ENERGY U-TURN: COAL INSTEAD OF GAS - DEUTSCHE WELLE
Berlin has realized it will never again import as much energy from Russia as before the Ukraine war. So the challenge is to wean Germany off its de ...
Saturday, 30 July 22
NUANCES OF FORCE MAJEURE CLAUSE - BALTIC EXCHANGE
Knowledge to Elevate
In NKD Maritime Limited v. Bart Maritime (No 2) Inc (Shagang Giant) [2022] EWHC 1615 (Comm), Bart Maritime (No 2) Inc (th ...
Saturday, 30 July 22
AEMO URGES QUICKER SHIFT TO RENEWABLES AMID COAL FAILURES AND SOARING FOSSIL FUEL COSTS
The Australian Energy Market Operator has called for an accelerated shift to wind and solar, backed up by batteries and other storage, as a devasta ...
Friday, 29 July 22
GLENCORE TO SUPPLY COAL TO NIPPON STEEL AT $375 PER TON - BLOOMBERG
Glencore Plc, agreed to supply coal to Nippon Steel at one of the highest prices ever paid by the Japan Bloomberg reported on July 27.
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- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Chettinad Cement Corporation Ltd - India
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- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Planning Commission, India
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- McConnell Dowell - Australia
- Economic Council, Georgia
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- The University of Queensland
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- PTC India Limited - India
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Heidelberg Cement - Germany
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- Aditya Birla Group - India
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
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- Kartika Selabumi Mining - Indonesia
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- Bayan Resources Tbk. - Indonesia
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