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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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Tuesday, 16 June 20
SHALE SHOCKED - WOOD MACKENZIE
Capturing shut-ins in real time
Oil markets are searching for balance as the world reflects on the impact of the COVID-19 pandemic. ...
Sunday, 14 June 20
INDONESIAN COAL WAS STILL IN DEMAND; A 52,000-DWT SUPRAMAX FIXING DELIVERY CJK FOR A ROUND VOYAGE VIA INDONESIA AT $6,250 - BALTIC BRIEFING
Capesize
The Capesize market made new highs for the year this week after strong iron ore demand to the far east continued to develop in the mar ...
Friday, 12 June 20
CHINA CURBS COAL IMPORTS AFTER 5 MONTHS OF RECORD INFLOWS - SOURCES: REUTERS
China has stepped up customs checks for coal imports, leading to lengthy processing delays at ports, four sources familiar with the matter said, as ...
Friday, 12 June 20
COAL INDIA LIMITED SET FOR MARKETING DRIVE TO CREATE DEMAND - FINANCIAL EXPRESS
State-run miner Coal India (CIL), which is primarily focused on supplying coal to the power sector, is now reorienting its marketing to create dema ...
Friday, 12 June 20
MOODY'S REVISES BRENT OIL PRICE OUTLOOK TO $35/BARREL IN 2020 - TASS
Low oil prices are likely to exert the highest pressure on Iraq, Oman and Kuwait due to the limited space for the fiscal policy pursuit and higher ...
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- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- The University of Queensland
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Heidelberg Cement - Germany
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Parliament of New Zealand
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
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