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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, 19 March 20
BIMCO REVISES 2020 FORECAST FOR MAIN SHIPPING MARKETS
The coronavirus pandemic is impacting global shipping demand for 2020 negatively. The speed of the virus spread makes it difficult to assess the fu ...
Thursday, 19 March 20
U.S. COAL EXPORTS DECLINED IN 2019 - EIA
In 2019, U.S. coal exports declined to 93 million short tons (MMst), a 20% decrease from the previous year, according to the U.S. Energy Informatio ...
Thursday, 19 March 20
SOUTH KOREA'S KOSPO INVITED BIDS FOR MIN 3,700 OR MIN 4,200 NCV LOW CALORIFIC VALUE COAL
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO), has issued an international tender for total 160,000 MT (±10%) (80,000 x 2 Panamax) of ...
Wednesday, 18 March 20
DRY BULK: INDONESIAN COAL CARGOES PROVIDING A BIG BOOST IN THE EAST WHERE SENTIMENT FOR HANDIES ALSO STARTED IMPROVING - INTERMODAL
The BDI ended last week with small gains on the back of an encouraging number of cargoes out of key trading regions that helped sustain the reserve ...
Wednesday, 18 March 20
SHIPPING MARKET INSIGHT - INTERMODAL
Despite we all knew about the Covid-19 weeks ago, few could realize the size of the thread until the last few days. The examples of China and Italy ...
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- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- Romanian Commodities Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Australian Coal Association
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Kaltim Prima Coal - Indonesia
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Edison Trading Spa - Italy
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Parliament of New Zealand
- Posco Energy - South Korea
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- Electricity Authority, New Zealand
- The University of Queensland
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- Aditya Birla Group - India
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
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