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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, 24 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.28 PCT - XINHUA
China Taiyuan coal transaction price index stood at 132.74 points Monday, down 0.28 percent week on week.
The index, released by Chi ...
Monday, 23 March 20
CHARTERPARTY REQUIREMENTS TO NOTIFY CLAIMS - TAKE CARE! - WFW
KNOWLEDGE TO ELEVATE
Voyage charterparties frequently require the owner to notify any claim with supporting documents within a relatively shor ...
Monday, 23 March 20
COAL INDIA LIMITED'S ONE-DAY OUTPUT PEAKS AT 3.17 MT - THE HINDU
Coal India Limited (CIL) output peaked at a new high of 3.17 million tonnes (MT) on March 20, overtaking the 3.14 MT production recorded on March 2 ...
Monday, 23 March 20
KOMIPO INVITED BIDS FOR 1.45 MILLION TONS OF COAL FOR JUNE & JULY 2020 LOADING
COALspot.com: Korea Midland Power Co.,Ltd (KOMIPO), on behalf of five Korean Gencos, has issued an international tender for total 1,450,000 MT (&pl ...
Saturday, 21 March 20
PANAMAX: 82,000DWT SHIP AGREED $4,250 FOR A COAL TRIP VIA INDONESIA REDELIVERY SOUTH CHINA - BALTIC BRIEFING
Capesize
The Capesize market made some headway this past week despite being buffeted by the global pandemic storm. With the market in a constan ...
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- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- White Energy Company Limited
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
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