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Saturday, 10 February 18
OIL PRICE USD 100/BARREL BY END OF 2018! - SAROJ MOHAPATRA
All demand supplies calculations are going wrong in oil market at present. US production is increasing at a good pace and set to topple Saudi comfortably as the world’s largest crude producer and to break its previous record of 10.7 Million bpd very soon, registered way back in 1970. Still the investment banks are moderating their previous estimates northwards. Recently JP Morgan estimated 2018 average oil price at USD 70 per barrel, which is approx. 50% higher than its estimates published just six months before. Goldman Sachs went one step ahead by forecasting the 2018 price at USD 80. These estimates are happening against the backdrop of known news of increased oil production from Kazakhstan and Nigeria offshore and ramp up in Libya and may be Venezuela in 2018. Also nobody expects that the winter across globe will be as cruel as in 2017.
In last article it was discussed that US, Russia, Saudi Arab have a good say in affecting the trend of oil price. They together produce appox 30 million bpd of oil against total world’s production of 80 million bpd i.e aprox 40%. Until 6-10 years before Saudi Arab was playing a pivot role in balancing the oil price as a swing producer.
As a swing supplier Saudi Arab was very much successful in limiting the price rise of crude upto good extent despite higher demand from both developed and developing economies. Now from demand side there seem to be no significant boost because of no extraordinary economic growth in China and India. Already the demands in developed countries like EU, Japan, South Korea etc except US are almost stagnant.
Now let us come to our subject line how higher oil price is the new reality in 2018. We are forgetting about a huge event that was missed in 2017 and set to happen in late 2018. It’s the world’s largest ever IPO of Saudi Aramco. For 5% disinvestment, Saudi Govt expects to earn more than USD 100 billion. Apart from income through IPO, the most important thing is the valuation of Saudia Aramco as a whole which will be calculated after IPO. US has also good existing interests in Saudi Aramco. Even investment bankers will earn directly as a stakeholder of IPO. Indirectly there is a golden opportunity to earn billions through derivative market of oil. As per recent report, hedge funds have increased their bullish position in oil, despite the fact that oil has reached the highest level of 2014. Net long positions have been raised across WTI, Brent, NYMEX, ICE, US gasoline etc. Now the ratio of hedge long position to short position has reached 11.5 against the same ratio of 1.5 in June 2017 i.e just few months back. It shows how bullish the market is but may be in hibernation show J . Last year it seems the said IPO was delayed just because the oil price was low (relative to expectation of Saudi Arab), though other reasons of no-decision of IPO subscription market place whther Newyork or london exchange were cited.
It is indeed a last opportunity in front of Saudi arab to earn billions just by selling a small stake in company. This is at a time when big economies like UK, France China have decided to go away from liquid fuel in transportation and industrial sector except petrochemicals (where refined products will be used as feed) by 2030-35. In 2008 when oil touched its peak, Saudi arab produced around 8.5 Million bpd. Lets imagine in case now Saudi Arab lowers its production to 8.5 mbpd or even lower, USD 100 per barerl is simply just a cakewalk for Oil.
Saudi Arab’s dynamic, modern-age and powerful crown prince Muhammad Bin Salman estimates the value of Saudi Aramco more than USD 2 Trillion, which is even more than GDP of almost all countries except 5 or 6. Saudi Arab may also try to disinvest more than 5% as an last attempt to have higher earnings. For that Oil need to be shown off to the outside world very bullish.
Therefore it may be concluded that Saudi Arab is in the process of cutting its oil production in a larger volume (against the official published figures) or will cut aggressively in future as against present rate just to ensure oil price is at higher side by the expected timeline of IPO i.e. Oct 2018. It also may have taken the investment bankers into confidence to ensure high over subscription of world’s largest ever IPO possible. The volume of long positions of hedge funds and money managers are probably just indication.
Just tried to put forward the thought on an idle weekend :) along with logic. Lets See what actually happens finally by dawn of 2019 :).
Saroj Mohapatra
DGM - Marketing and Contracts at H-Energy Group Of Companies
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Monday, 01 April 19
FORCE MAJEURE SUCCESS NOT A SEA CHANGE - BALTIC EXCHANGE
KNOWLEDGE TO ELEVATE
It is difficult to successfully argue that contractual performance has been prevented or delayed by force majeure. This i ...
Monday, 01 April 19
AUSTRALIAN COAL AT RISK FROM CHINA MOVE, WARNS GOVERNMENT REPORT - SYDNEY MORNING HERALD
A new government report warns China’s restrictions on coal imports is the number one risk for Australian coal this year and could lead to a s ...
Saturday, 30 March 19
KOEN INVITES BIDS FOR 450,000 TONS OF (SUB) BITUMINOUS COAL FOR H1 AND JUNE 2019
South Korea state-owned utility KOREA SOUTH-EAST POWER CO., LTD. (KOEN) issued a tender for total 450,000 MT of min. 4300, 3500 and 5600 NCV ...
Wednesday, 27 March 19
SHIPPING MARKET INSIGHT - INTERMODAL
Contrary to the December 2018 forecasts but in line with the expectations of the dry bulk market, the first quarter of the year closed negatively. ...
Saturday, 23 March 19
IT WAS A POSITIVE WEEK FOR THE HANDY SIZE MARKET - BALTIC BRIEFING
Capesize
The big ships endured heavy losses last week extinguishing any hopes from the recent minor rally. Negative sentiment gained pace throu ...
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Showing 1416 to 1420 news of total 6846 |
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- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Planning Commission, India
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Posco Energy - South Korea
- PTC India Limited - India
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- The University of Queensland
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- Anglo American - United Kingdom
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
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