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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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Wednesday, 22 October 14
CAPESIZE MARKET REMAINED UNDER PRESSURE
COALspot.com: The Dry Bulk market closed on the red for yet another week although following Friday sentiment has started to improve on the back of ...
Tuesday, 21 October 14
INDIA'S DIESEL DEREGULATION POSITIVE FOR OIL COMPANIES - FITCH
The Indian government's 18 October decision to deregulate diesel prices will have a positive effect on the national oil marketing companies tha ...
Tuesday, 21 October 14
LOW DEMAND PUTTING COAL SWAPS UNDER PRESSURE
COALspot.com: Indonesian coal swaps for delivery Q4' 2014 lost on day, week and month.
The swap has lost US$ 1.57 (-3.04%) month on month ...
Monday, 20 October 14
CHINA'S ENVIRONMENTAL POLICIES DO NOT SPELL THE END FOR COAL - WOOD MACKENZIE
China's environmental policies do not spell the end for coal Analysis across energy commodities show coal still accounting for 64% of power mix ...
Monday, 20 October 14
CFR SOUTH CHINA COAL SWAPS FAILED TO PERFORM POSITIVE
COALspot.com: API 8 CFR South China Coal swap for Q4’ 2014 delivery decreased US$ 3.04 (-4.57%) month over month and US$ 1.75 (-2.68%) week o ...
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- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- PTC India Limited - India
- Marubeni Corporation - India
- Australian Coal Association
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- The University of Queensland
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- Planning Commission, India
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- Independent Power Producers Association of India
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- CIMB Investment Bank - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- McConnell Dowell - Australia
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