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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, 12 May 20
CAN INDONESIA'S COAL INDUSTRY SURVIVE COVID-19? : IEEFA
Pandemic Lockdown and Slumping Prices Put Extreme Pressure on Coal Miners
Executive Summary
While attention has been focused on th ...
Tuesday, 12 May 20
INDIA'S COAL PRODUCTION TO CLOCK RECORD 700 MILLION TONNES IN FY21: COAL SECRETARY - PTI
Coal Secretary Anil Jain said FY20 coal production was lower than the target of 660 million tonnes because of flooding of a key coal mine.
&nbs ...
Monday, 11 May 20
CHINA'S BENCHMARK POWER COAL PRICE DROPS SLIGHTLY - XINHUA
China’s benchmark power coal price dropped slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...
Monday, 11 May 20
CORONAVIRUS PUTS MORE THAN A THIRD OF SEABORNE COAL SUPPLY AT RISK - WOOD MACKENZIE
The full impact of the coronavirus outbreak on the global economy is yet unclear. However, the demand destruction is already becoming evident, with ...
Saturday, 09 May 20
ANGLO AMERICAN CONSIDERS SPINNING OFF SOUTH AFRICAN COAL OPERATIONS - REUTERS
Diversified miner Anglo American said on Thursday it prefers unbundling and listing its thermal coal operations in South Africa on the Johannesburg ...
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- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Electricity Generating Authority of Thailand
- Borneo Indobara - Indonesia
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Marubeni Corporation - India
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
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