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Wednesday, 08 October 14
OIL COULD FALL TO USD80 BEFORE SHALE SUPPLY RESPONSE - FITCH
 COALspot.com: Brent oil could fall as low as USD80 a barrel before triggering a self-correcting supply response with shale-oil drillers cutting investment in new wells, Fitch Ratings says.
According to Fitch, the steep rate at which production from shale wells declines mean companies have to keep drilling new wells to maintain production. We estimate median full-cycle costs for US exploration and production companies have fallen to about USD70. The marginal barrel, not the median one, balances supply and demand and determines price, so the point at which capex falls will probably be higher. Exactly where depends on expectations of future price. Anecdotally we understand that at USD90/bbl capex is likely to continue at full speed, while at USD75-80/bbl it may fall. This would have a relatively rapid impact on production, suggesting a notional price floor.
Fitch noted that, in the short term we consider a resurgence of supply disruptions and positive action from OPEC the most likely catalysts for a rebound in prices. But without these, further declines might be possible, especially if evidence grows of further weakening of global demand or increasing OPEC spare capacity.
The notional floor is well below the USD100/bbl level that many market participants thought was here to stay earlier this year. But in the last two weeks Brent crude has fallen - and stayed - significantly below USD100/bbl, and WTI crude has fallen below USD90/bbl for the first time since 2012. The difference between the two benchmarks has shrunk to around USD2.50, and forward curves also indicate weakness, Fitch noted.
The key supports for USD100+ oil were growing demand, tight OPEC spare capacity, increasing cost of supply, particularly combined with rapid depletion rates for shale wells, OPEC's desire for high oil prices, and political and security issues in key regions.
Fitch further noted, demand has been the clearest change in the short term, but is also the element that may most reliably reverse in the long term. If China and India grow as expected demand could rise by up to a third in the next 20-30 years - but this does not preclude short-term weakness.
OPEC has declared support for prices at USD100/bbl. Some members would prefer this price or higher, but we estimate Saudi Arabia, which would have to absorb the greatest production cuts, would be able to balance its budget at USD94/bbl. A lot will therefore ride on the outcome of OPEC's next meeting in November, said Fitch.
The geopolitical and security picture has not resulted in the predicted fall in production. Progress is being made on Iranian sanctions; Iraqi production has remained robust; Libyan production is starting to recover. Market sentiment suggests the effects of these situations will remain benign - but there is potential for this to reverse quite rapidly.
We do not expect rating implications from the price dip in the short term. Our corporate and sovereign ratings use price assumptions that drop over time, and companies and governments have shown themselves able to adjust spending to weaker prices if necessary. The rising US dollar, which has strengthened against the euro by around 10% since the middle of the year, is also contributing to weakness in oil prices when expressed in dollar terms, as our price decks are.
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Thursday, 13 November 14
MODERN DRY BULK SHIPS' PRICES START FIRMING UP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
While the main story of the past few weeks has been the rebound of the dry bulk market, which has been a result of increased Chinese iron ore impor ...
Wednesday, 12 November 14
PANAMAX: WITNESSED A FAIRLY STABLE MARKET IN THE ATLANTIC
COALspot.com: Despite the fact that the Dry Bulk market noted another weekly increase, clouds of uncertainty returned mid-week onwards, as the mini ...
Wednesday, 12 November 14
SHIPPING MARKET INSIGHT - CHRISTOPHER T. WHITTY
COALspot.com: The fight continues between the low-cost iron ore producers and the big three: Vale, Rio Tinto and BHP Billiton. We are moving into a ...
Tuesday, 11 November 14
FACING CHALLENGES AND MEETING OPPORTUNITIES - INTERNATIONAL EPC CONFERENCE & EXHIBITION
Press Release: SKYCONNECTION and TRANSEVENT, which is fully supported by the Institution of Engineers Indonesia and Ministry of Industry of the Rep ...
Tuesday, 11 November 14
NEWCASTLE COAL SWAP CLOSED AT $ 52.65 FOR Q1' 15 DELIVERY
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery decreased US$ 2.83 (-5.10%) month over month and US$ 1.35 (-2.50%) week ove ...
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- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Planning Commission, India
- Xindia Steels Limited - India
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- South Luzon Thermal Energy Corporation
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Sical Logistics Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Merrill Lynch Commodities Europe
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
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