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Wednesday, 10 June 20
OPEC+ CUTS EXTENSION TO ACCELERATE MARKET REBALANCING - FITCH RATINGS
 Fitch Ratings-London-08 June 2020: The OPEC+ agreement to extend by one month record oil production cuts should accelerate market rebalancing, Fitch Ratings says. This is further supported by a commitment to improve compliance from those countries that were unable to reach full conformity with the cuts.
The OPEC+ countries have made radical production cuts in the stress scenario, but it may be more difficult to reach a consensus when the worst of the crisis is over. And it is unclear whether the recovery in oil prices to date is sustainable. Furthermore, demand and production in non-OPEC+ countries, notably the US, will continue to have a significant impact on the supply-demand balance and prices. We believe that a normalisation of oil inventory built up in 1H20 will take at least several months.
Crude oil prices rose significantly in May and continued to improve in early June, because the surplus has been reduced materially. A price differential between the physical and financial markets has disappeared, pointing to crude oil market tightening. We believe that a stress case scenario with prices falling significantly below USD30/bbl is now less likely. The market is likely to experience a production deficit in 2H20 due to gradually improving demand and reduced supply.
The OPEC+ cuts were the major contributor to market rebalancing. We estimate that the OPEC+ countries reduced production by around 7.5mmbpd in May compared to March. The cumulative OPEC+ cuts should exceed 9mmbpd in June as Saudi Arabia, Kuwait and UAE have committed to cut an additional 1.1mmbpd, while Iraq and Nigeria, which underperformed in May, have promised to improve compliance in June. A resumption of production in Libya, which is not subject to the OPEC+ deal, may increase supply but should be more than offset by additional cuts elsewhere.
Furthermore, production fell in the US as a result both of shut-ins and reduced drilling activity by almost 2mmbpd at end-May compared to March, while Canada cut around 1mmbpd. The number of active drilling rigs in the US declined by 64% compared to the beginning of the year. Production in North America may continue to shrink for a while, but the pace is likely to decelerate due to increased prices. We believe that at USD30/bbl, many producers should be able to stabilise production, while at USD40/bbl or above some would be tempted to increase output, which could limit price recovery.
Estimates suggest crude oil demand increased in May compared to April, and we believe it will improve further from June due to the gradual lifting of lockdown restrictions. Implied oil products consumption in the US improved from a 28% drop in April yoy to a 20% drop in May, driven mainly by increased gasoline consumption (a yoy decline of 25% in May compared to a 44% decline in April), while the consumption of jet fuel remained flat. We believe consumption patterns are similar in Europe, while demand in China bottomed out in February.
Demand recovery is now key in achieving balance in the oil market. It could be undermined in the event of a second coronavirus wave and the re-introduction of lockdowns, although it is not our base case. While consumption of gasoline and diesel could recover by the year-end, jet fuel may lag behind as international travel restrictions may remain in place and demand for business travel may be structurally impaired.
Our ratings are informed by companies’ projected performance at end-2021, rather than in 2020, provided their liquidity is adequate, as we rate “through the cycle”. While we may recalibrate our near-term oil price assumptions to the pace of market rebalancing, our ratings already assume that the market will recover gradually; therefore the most recent improvements will not prompt portfolio-wide rating actions.
Source: Fitch Ratings
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Monday, 29 June 20
CHINA COAL IMPORT OUTLOOK: MANY MOVING PARTS, FORECAST TO FALL 10% YOY - GHEE PEH | IEEFA
China’s coal demand declined in the first quarter of 2020. According to the China National Coal Association, the country consumed 870mt in th ...
Monday, 29 June 20
ULTRAMAX: A 58,000 FIXING DELIVERY SINGAPORE TRIP, VIA EAST COAST INDIA, REDELIVERY CHINA IN THE LOW $12,000S - BALTIC BRIEFING
Capesize
As the halfway mark of 2020 arrives, the capesize market is making new highs for the year. From persistent lows earlier caused by a ba ...
Saturday, 27 June 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 26 June 20
WHAT TODAY'S BAILOUTS CAN DO FOR TOMORROW'S ECONOMIES - WORLD ECONOMIC FORUM
The COVID-19 crisis provides an opportunity for governments to build fairer, more sustainable and more resilient economies.
Governments a ...
Thursday, 25 June 20
ALL YOU WANT TO KNOW ABOUT COAL MINE AUCTIONS - THE HINDU BUSINESS LINE
Last week, Prime Minister Narendra Modi threw open the auction of 41 coal blocks for commercial mining. The decision, which was part of the announc ...
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- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Planning Commission, India
- White Energy Company Limited
- Central Electricity Authority - India
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- ASAPP Information Group - India
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Sojitz Corporation - Japan
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- PetroVietnam Power Coal Import and Supply Company
- Bhushan Steel Limited - India
- Wilmar Investment Holdings
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
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