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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, 02 June 20
THE HISTORIC DECLINE OF US COAL - WOOD MACKENZIE
The first commercial power plant in the US was Thomas Edison’s coal-fired Pearl Street station in lower Manhattan, which started operating in ...
Tuesday, 02 June 20
COAL INDIA'S MAY SALES DRIVEN SHARPLY LOWER BY SLUMP IN POWER DEMAND - REUTER
Coal India’s sales fell 23.3% in May as utilities refrained from purchases amid record stockpiles and tepid demand because of a nationwide lo ...
Tuesday, 02 June 20
TUAH TURANGGA AGUNG RECORDED 4.54 MILLION TONS OF COAL SALES IN THE FIRST FOUR MONTHS OF 2020
PT United Tractors Tbk through its subsidiary, PT Tuah Turangga Agung recorded 4.54 million tons of coal sales in the first four months of 2020, up ...
Tuesday, 02 June 20
SOURING SINO-AUSTRALIA TRADE RELATIONS - BALTIC EXCHANGE
Cooling relations between the commodity powerhouses of China and Australia may point to trade troubles ahead when the world emerges from the Covid- ...
Tuesday, 02 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.86 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.95 points Monday, down 0.86 percent week on week.
The index, released by Chi ...
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- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- The University of Queensland
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Larsen & Toubro Limited - India
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Parliament of New Zealand
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Eastern Coal Council - USA
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