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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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Monday, 01 June 20
SUPRAMAX: IN SOUTH EAST ASIA RATES TRADED SIDEWAYS - BALTIC BRIEFING
Capesize
A sober end to the week, with the market seemingly ready for the weekend. After a steady week of rate declines a small flurry of Atlan ...
Friday, 29 May 20
COVID-19: COAL SUPPLY BY CIL TO POWER SECTOR DIPS 22% TO 32 MT IN APRIL DUE TO DEMAND SLUMP - PTI
Over 95% of CIL’s production comes from its 171 open cast mines.
The supply of coal to the power sector by state-owned Coal In ...
Friday, 29 May 20
AUSTRALIA'S NEW HOPE WARNS OF HIT FROM COAL PRICE SLUMP - REUTERS
Australia’s New Hope Corp Ltd said on Thursday that a sudden drop in thermal coal prices and lower output from its Queensland operations woul ...
Friday, 29 May 20
GOVT MAY LAUNCH COAL BLOCKS AUCTION PROCESS UNDER COMMERCIAL MINING ON JUN 11 - PTI
The Centre is likely to launch the process of coal blocks auction under commercial mining on June 11 and around 50 mines are expected to go under t ...
Friday, 29 May 20
KOMIPO ON BEHALF FIVE KOREAN GENCOS INVITED COAL BIDS FOR 5,700 & 4999 NCV COAL FOR AUGUST 2020 LOADING
COALspot.com: South Korea’s Korea Midland Power Co.,Ltd (KOMIPO) on behalf five (5) Korean Gencos has Issued an International Tender for tota ...
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- Timah Investasi Mineral - Indoneisa
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- ASAPP Information Group - India
- Thai Mozambique Logistica
- White Energy Company Limited
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- The University of Queensland
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
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