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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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Friday, 20 March 20
VOLATILITY TO INCREASE IN TANKER MARKET FOLLOWING OIL PRICE WAR - DREWRY
Crude oil prices plunged by more than a third in the past week after OPEC+ failed to agree on production cut as demand softened in the aftermath of ...
Friday, 20 March 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 ...
Friday, 20 March 20
OIL PRICES COULD FALL BELOW ZERO: ANALYST - FOX BUSINESS
Plunging oil prices could be headed a lot lower – possibly below zero, according to one Wall Street analyst.
West Texas Interm ...
Friday, 20 March 20
84% OF FEBRUARY BUNKER SALES IN SINGAPORE ARE LOW-SULPHUR FUELS - BIMCO
Low-sulphur fuels accounted for 84% of total February sales in Singapore, slightly up from 83% in January. The sale of low-sulphur fuel oil (LSFO) ...
Thursday, 19 March 20
A CRUDE TSUNAMI: UP TO 3 MILLION BPD OF EXTRA OIL CAN HIT THE MARKET FROM APRIL, MORE COMING IN MAY - RYSTAD ENERGY
The extra oil coming into the global market from April will be as much as 3 million barrels per day (bpd), Rystad Energy estimates. Two million bpd ...
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- Kaltim Prima Coal - Indonesia
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bangladesh Power Developement Board
- Mercator Lines Limited - India
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Ministry of Mines - Canada
- Wilmar Investment Holdings
- Minerals Council of Australia
- Meralco Power Generation, Philippines
- Australian Coal Association
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
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