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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, 25 May 20
NON-OPEC OIL SUPPLY DEVELOPMENT - OPEC
Non-OPEC oil supply continued to increase by 2.0 mb/d in 2019, driven by US shale production, which rose by 1.7 mb/d, amounting to 84% of total non ...
Sunday, 24 May 20
A 63,000 FIXED DELIVERY VIETNAM TRIP VIA INDONESIA REDELIVERY KOSICHANG AT $8,500 - BALTIC BRIEFING
Capesize
After a week of bounce momentum the market appears to have stalled out once again. The Capesize 5TC has more than doubled since last F ...
Saturday, 23 May 20
COLOMBIA COAL OUTPUT DOWN 7.2% IN Q1 ON LOW PRICES, CORONAVIRUS LOCKDOWN - REUTERS
Coal production in Colombia, the world’s fifth-largest coal exporter, fell 7.2% in the first quarter because of low prices and coronavirus qu ...
Saturday, 23 May 20
EWP INVITES BIDS FOR 840,000 METRIC TONS OF MIN 5700 NAR COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd (EWP) has Issued an International Tender for total Max 840,000 Metric Tons of min 5 ...
Thursday, 21 May 20
KOMIPO INVITED BIDS FOR TOTAL 610000 MT OF LCV AND HCV COAL FOR 2H 2020
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) has Issued an International Tender for 130,000 mt of 5700 NCV coal an ...
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- ASAPP Information Group - India
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- CNBM International Corporation - China
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- Independent Power Producers Association of India
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Gujarat Sidhee Cement - India
- Sinarmas Energy and Mining - Indonesia
- Cement Manufacturers Association - India
- Sical Logistics Limited - India
- GMR Energy Limited - India
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Price Waterhouse Coopers - Russia
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
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