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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, 18 May 20
THERMAL COAL SPOT PRICE TUMBLES 25 PER CENT, PUTTING PRESSURE ON SOME PRODUCERS - ABC RURAL
The spot price for thermal coal has fallen 25 per cent per cent in the past month with one leading analyst saying it is because of a reduction in d ...
Monday, 18 May 20
CHINA'S COAL OUTPUT UP 1.3 PCT IN JANUARY-APRIL: XINHUA
Output of raw coal in China rose 1.3 percent year on year to 1.15 billion tonnes in the first four months this year, official data showed.
&nbs ...
Sunday, 17 May 20
A 55,000 OPEN ILIGAN FIXING AT $6,500 VIA INDONESIA REDELIVERY INDIA - BALTIC BRIEFING
Capesize
A precipitous fall in the market this week had the Capesize 5TC shedding over 50 per cent in value. A small rebound at the end of the ...
Friday, 15 May 20
CHINA'S COAL CONSUMPTION TO FALL Y/Y IN SECOND QUARTER, IMPROVEMENT EXPECTED IN SECOND HALF - INDUSTRY BODY: REUTERS
China’s coal consumption is expected to decline in the second quarter from a year earlier, but will see an improvement in the second half of ...
Thursday, 14 May 20
OPEC REVISES DOWN GLOBAL OIL DEMAND FORECAST AGAIN
Crude Oil Price Movements
Crude oil prices recorded a second sharp monthly drop in April, amid an increasing oil surplus in the spot market. Th ...
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- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Mercator Lines Limited - India
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Trasteel International SA, Italy
- Cement Manufacturers Association - India
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- White Energy Company Limited
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
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