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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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Sunday, 09 November 14
CAPE INDEX UP 3.06%; PANAMAX INDEX FELL 4.05%
COALspot.com: The BDI was almost at same levels compared to last week closing or just increased 0.77 pct from last week. The BDI was closed at 1437 ...
Friday, 07 November 14
U.S. PRODUCED 85.60 MILLION SHORT TONS OF COAL IN OCTOBER, UP 2.88% M-O-M
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.0 million short tons (mmst) of coal ...
Thursday, 06 November 14
THE ATLANTIC HAS REMAINED STRONG WITH A HEALTHY SUPPLY OF NEW CARGOES
Handy
This week has continued its slow trend in both hemispheres and even though rates are a bit up w-o-w it is not a clear sign for any improvem ...
Wednesday, 05 November 14
CAPESIZE SEGMENT ENJOYED FIRMING RATES ACROSS BOTH BASINS
Following a fantastic week in terms of rate performance for Capes, the Dry Bulk market managed to note another positive weekly closing, which stron ...
Wednesday, 05 November 14
SHIPPING MARKET INSIGHT - PANOS TSILINGIRIS
COALspot.com: The steep appreciation in dry bulker values between late 2012 and March 2014 resulted in unrealistically expensive ship values compar ...
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- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- Central Electricity Authority - India
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Agrawal Coal Company - India
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
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