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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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Wednesday, 24 June 20
MARKET INSIGHT - INTERMODAL
The World Bank estimates that the global economy will fall by 5.2% this year, underlining that the Covid-19 pandemic has had rapid and massive cons ...
Tuesday, 23 June 20
COVID-19 COULD CAUSE A BOOM IN COAL POWER - RYSTAD ENERGY | OILPRICE
COVID-19 has not only impacted the energy industry’s revenues but also its infrastructure development.
The delay of new natural gas ...
Tuesday, 23 June 20
CHINA'S COAL OUTPUT UP 0.9 PCT IN JANUARY-MAY: XINHUA
Output of raw coal in China rose 0.9 percent year on year to 1.47 billion tonnes in the first five months of this year, official data showed.
& ...
Monday, 22 June 20
KAMSARMAX TYPES REGULARLY HIT THE $9,000 PER DAY LEVEL FOR INDONESIAN COAL RUN TO CHINA, BALTIC BRIEFING SAYS
Capesize
The Capesize market trajectory this week has been one of the steepest rallies the sector has experienced. Opening at $12,410, the sect ...
Saturday, 20 June 20
WORLD OIL DEMAND IS PROJECTED TO DECREASE BY 9.1 MB/D IN 2020 - OPEC
Crude Oil Price Movements
Spot crude oil prices rebounded in May from low levels registered a month earlier, as physical market fundamentals im ...
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- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Malabar Cements Ltd - India
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- White Energy Company Limited
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- Bukit Makmur.PT - Indonesia
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Australian Coal Association
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Parry Sugars Refinery, India
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- McConnell Dowell - Australia
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Bhatia International Limited - India
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
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