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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, 16 April 20
MARKET INSIGHT - INTERMODAL
As everyone anticipated the results of the OPEC + G20 meeting last week, it was very interesting to watch the reaction of tanker rates that were in ...
Monday, 13 April 20
SUPRAMAX: A 56,000DWT SHIP WAS FIXED DELIVERY PARADIP, REDELIVERY CHINA, AT $4,700 - BALTIC BRIEFING
Capesize
The Capesize market this past week looks to have come off life support and found some improved sentiment. The week began rather ordina ...
Saturday, 11 April 20
FAQ: COVID-19 AND CLUB COVER - UK P&I
KNOWLEDGE TO ELEVATE
The Coronavirus (COVID-19) pandemic has generated a significant number of enquiries and questions from Members in recent ...
Saturday, 11 April 20
KOEN POWER PLANTS INVITED BIDS FOR 1.5 -1.62 MMT OF STEAM COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 1,500,000-1,620,000 Metric Tons (M ...
Friday, 10 April 20
INDIA'S BULKS SUPPLY CHAIN TAKES A HIT DURING LOCKDOWN - WOOD MACKENZIE
India is under a three-week lockdown from 25 March to contain the spread of the coronavirus outbreak. Businesses are shut, and the supply chain is ...
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Showing 1016 to 1020 news of total 6871 |
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- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Indian Energy Exchange, India
- PTC India Limited - India
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Australian Coal Association
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
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