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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, 07 May 20
UKRAINE PRODUCES 2.5 MLN TONNES OF COAL IN APRIL - UKRINFORM
Ukraine produced 2.5 million tonnes of coal in April 2020, which is 39% less than planned, according to the Coal Miners Union of Ukraine.
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Thursday, 07 May 20
INDIA: GOVT TO DO AWAY WITH MANDATORY WASHING OF COAL FOR THERMAL POWER UNITS - BUSINESS STANDARD
The Centre is planning to do away with the mandatory requirement of washing of coal before it is transported to thermal power stations. The Ministr ...
Thursday, 07 May 20
CIL'S SUPPLY TO POWER SECTOR FALLS IN MARCH AMID SLUMP IN COAL DEMAND - PTI
The supply of coal to the power sector by state-owned CIL registered a decline of eight per cent to 42.30 million tonne in March in the wake of slu ...
Thursday, 07 May 20
COAL PRICE REFERENCE FALL SHARPLY IN MAY 2020 DUE TO CORONAVIRUS OUTBREAK
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 06 May 20
KOSPO INVITED COAL BIDS FOR LOW CALORIFIC VALUE COAL
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 160,000 Metric Tons (MT) Low Calorific Value Coal for J ...
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- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Planning Commission, India
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Coal Association
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- Central Electricity Authority - India
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- LBH Netherlands Bv - Netherlands
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