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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, 16 October 14
PANAMAX OWNERS RECEIVE A PREMIUM FOR GOING TO INDIA VIA INDONESIA - FEARNLEYS AS
Handy
The Handy/Supra market continues to slide in both hemispheres, said Fearnleys AS in its latest week report. In the Atlantic we see rates co ...
Thursday, 16 October 14
ARE WE GOING TO SHOOT OURSELVES IN THE FOOT ONCE AGAIN? - PANOS MAKRINOS
As the East part of our globe was coming back from its October holidays last week, everyone expected that the Dry Bulk market would follow suit and ...
Wednesday, 15 October 14
PANAMAX: ACTIVITY IN THE PACIFIC WAS UNIMPRESSIVE
The Dry Bulk market noted another weekly decline last week, while the BDI moved below 1,000 points taking down with it expectations that a post hol ...
Wednesday, 15 October 14
INDONESIAN COAL PRICE REFERENCE FELL TO FRESH MULTI-YEAR LOWS IN OCTOBER
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down the coal bench mark price once again in October 2014.
...
Wednesday, 15 October 14
DRY BULK SHIPPING: RATE IMPROVEMENTS ARRIVED AS FORECAST, BUT UNCERTAINTY MOUNTS FOR 2015 DEMAND - BIMCO
BIMCO released its latest short term assessment of the dry bulk market, estimating that over the October-November period, the level of Capesize TC ...
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- Semirara Mining and Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Videocon Industries ltd - India
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Cement Manufacturers Association - India
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Renaissance Capital - South Africa
- White Energy Company Limited
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
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