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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, 04 May 20
U.S. ESTIMATED COAL PRODUCTION FALL 39.4% YEAR ON YEAR IN THE WEEK ENDED APRIL 25 - EIA
Estimated U.S. coal production totaled about 8.6 million short tons (MMst) For the week ended April 25, 2020, says EIA in its latest report.
E ...
Saturday, 02 May 20
SUPRAMAX: ASIA, STRONGER NUMBERS - A 55.000-DWT WAS FIXED FROM INDONESIA TO CHINA IN THE MID $6,000S - BALTIC BRIEFING
Capesize
A tepid week for the big ships, as macro concerns continued to weigh heavily on the index. All of the major voyage routes lost value, ...
Friday, 01 May 20
KOSPO INVITED OFFER FOR 5600 NCV COAL FOR Q3 2020 LOADING
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 260,000 Metric Tons (MT) steam coal for Boryeong Power ...
Friday, 01 May 20
GLOBAL COAL DEMAND TO FALL BY ABOUT 8% IN 2020,THE LARGEST DROP SINCE WORLD WAR II - IEA
We expect global coal demand to fall by about 8% in 2020, the largest drop since World War II, with coal use declining in virtually every sector of ...
Friday, 01 May 20
GLOBAL COAL DEMAND TO FALL BY 8% IN Q1 2020 RELATIVE TO Q1 2019 - IEA
We expect global coal demand to fall by 8% in Q1 2020 relative to Q1 2019. This significant drop was driven by lower demand in the electricity sect ...
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- Independent Power Producers Association of India
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Salva Resources Pvt Ltd - India
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Interocean Group of Companies - India
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- San Jose City I Power Corp, Philippines
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Petron Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Vijayanagar Sugar Pvt Ltd - India
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
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