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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, 06 June 20
KOREA SOUTH-EAST POWER CO INVITED COAL BIDS FOR MIN 5600 NCV COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 270,000 Tons (MT) min. 5600 NCV co ...
Friday, 05 June 20
COAL INDIA ESTIMATES PRODUCTION GROWTH BY OVERBURDEN REMOVAL - FINANCIAL EXPRESS
PSU miner Coal India (CIL) has now limited mining only to Overburden Removal (OBR) with falling demand of coal. The mining behemoth is now keeping ...
Friday, 05 June 20
U.S. SANCTIONS COMPLIANCE GUIDANCE RELEASED FOR THE GLOBAL MARITIME, ENERGY AND METALS SECTORS - AKIN GUMP
Key Points
On May 14, 2020, OFAC, the Department of State and the U.S. Coast Guard jointly released guidance for persons involved in the ma ...
Friday, 05 June 20
IN THE FIRST 5 MONTHS OF 2020 AUSTRALIA SHIPPED 6.8 MLN TONNES TO VIETNAM - BANCHERO COSTA
In the first 5 months of 2020, global seaborne coal trade declined by as much as -8% year-on-year, according to vessel tracking data from Ref ...
Thursday, 04 June 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
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- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Videocon Industries ltd - India
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Anglo American - United Kingdom
- India Bulls Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- The University of Queensland
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- Planning Commission, India
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kapuas Tunggal Persada - Indonesia
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
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