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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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- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- GVK Power & Infra Limited - India
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Australian Coal Association
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Planning Commission, India
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bharathi Cement Corporation - India
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
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