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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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Thursday, 14 May 20
NEW COVID-19 GUIDELINES FOCUS ON SAFE INTERFACE BETWEEN SHIP AND SHORE STAFF - GARD
At a time when the COVID-19 pandemic is affecting the global population, it is important that ships’ crew and port workers protect each other ...
Wednesday, 13 May 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.4 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.93 points Monday, down 0.4 percent week on week.
The index, released by Chin ...
Tuesday, 12 May 20
IN THE FIRST 4 MONTHS OF 2020, SOUTH KOREA IMPORTED 46.6 MLN TONNES OF CRUDE OIL BY SEA, A NET DECLINE OF 14.1% YOY - BC
South Korea is certainly one of the countries which has handled better the current Covid-19 crisis. In the first week of May 2020, new cases of ...
Tuesday, 12 May 20
OIL MARKET TURBULENCE PIVOTS FOCUS ON FLOATING STORAGE TECHNICAL NEEDS - LLOYD'S REGISTER
KNOWLEDGE TO ELEVATE
Negative oil prices and off-the-scale volatility in crude markets are positive for floating storage, as the next chapter ...
Tuesday, 12 May 20
A GLOBAL ECONOMIC RESTART HAS SLOWLY BEGUN AS COUNTRIES AROUND THE WORLD GRADUALLY - ALLIED
A global economic restart has slowly begun as countries around the world gradually set their return back to “normality”. Yet by all mea ...
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- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Barasentosa Lestari - Indonesia
- The University of Queensland
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cement Manufacturers Association - India
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- Economic Council, Georgia
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Planning Commission, India
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
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