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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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Saturday, 20 June 20
NO ESCAPING GLOBAL TRADE SLUMP - BALTIC EXCHANGE
Those hoping for a decent recovery in trade in the second half of the year should prepare for disappointment.
New data from the Unit ...
Friday, 19 June 20
INDIA'S COAL CONSUMPTION GROWTH IN 2019 SLOWEST SINCE 2001: BP STATS REVIEW - HINDU BUSINESS LINE
Growth in global energy markets slowed in 2019 in line with weaker economic growth, according to the bp Statistical Review of World Energy 2020. Th ...
Friday, 19 June 20
KOWEPO TO IMPORT 1,050,000 MT OF MIN 5300 NCV COAL FOR THREE YEARS
COALspot.com: Korera Western Power Co., Ltd. (KOWEPO) has issued an International tender for Total 1,050k MT Min.5,300 kcal/kg NCV coal for t ...
Thursday, 18 June 20
INDIA: GOVT'S PLAN TO CUT COAL IMPORT GOES FOR A TOSS AS FY20 BREAKS LOGISTICS CHAIN; LOCAL OUTPUT STAGNANT - FINANCIAL EXPRESS
Weak logistics support and disrupted supply chain towards the end of the last financial year 2019-20 hit the government’s plan to cut coal im ...
Thursday, 18 June 20
INDIA: THERMAL PLANTS TO OPERATE BELOW 53% CAPACITY IN FY21 AS POWER DEMAND DIPS - BUSINESS STANDARD
The Plant Load Factor (PLF) of thermal power stations across the country is projected to dip below 53 per cent in this fiscal. Muted power demand f ...
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- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- Australian Commodity Traders Exchange
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- McConnell Dowell - Australia
- The Treasury - Australian Government
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Grasim Industreis Ltd - India
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
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