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Wednesday, 08 October 14
OIL COULD FALL TO USD80 BEFORE SHALE SUPPLY RESPONSE - FITCH
 COALspot.com: Brent oil could fall as low as USD80 a barrel before triggering a self-correcting supply response with shale-oil drillers cutting investment in new wells, Fitch Ratings says.
According to Fitch, the steep rate at which production from shale wells declines mean companies have to keep drilling new wells to maintain production. We estimate median full-cycle costs for US exploration and production companies have fallen to about USD70. The marginal barrel, not the median one, balances supply and demand and determines price, so the point at which capex falls will probably be higher. Exactly where depends on expectations of future price. Anecdotally we understand that at USD90/bbl capex is likely to continue at full speed, while at USD75-80/bbl it may fall. This would have a relatively rapid impact on production, suggesting a notional price floor.
Fitch noted that, in the short term we consider a resurgence of supply disruptions and positive action from OPEC the most likely catalysts for a rebound in prices. But without these, further declines might be possible, especially if evidence grows of further weakening of global demand or increasing OPEC spare capacity.
The notional floor is well below the USD100/bbl level that many market participants thought was here to stay earlier this year. But in the last two weeks Brent crude has fallen - and stayed - significantly below USD100/bbl, and WTI crude has fallen below USD90/bbl for the first time since 2012. The difference between the two benchmarks has shrunk to around USD2.50, and forward curves also indicate weakness, Fitch noted.
The key supports for USD100+ oil were growing demand, tight OPEC spare capacity, increasing cost of supply, particularly combined with rapid depletion rates for shale wells, OPEC's desire for high oil prices, and political and security issues in key regions.
Fitch further noted, demand has been the clearest change in the short term, but is also the element that may most reliably reverse in the long term. If China and India grow as expected demand could rise by up to a third in the next 20-30 years - but this does not preclude short-term weakness.
OPEC has declared support for prices at USD100/bbl. Some members would prefer this price or higher, but we estimate Saudi Arabia, which would have to absorb the greatest production cuts, would be able to balance its budget at USD94/bbl. A lot will therefore ride on the outcome of OPEC's next meeting in November, said Fitch.
The geopolitical and security picture has not resulted in the predicted fall in production. Progress is being made on Iranian sanctions; Iraqi production has remained robust; Libyan production is starting to recover. Market sentiment suggests the effects of these situations will remain benign - but there is potential for this to reverse quite rapidly.
We do not expect rating implications from the price dip in the short term. Our corporate and sovereign ratings use price assumptions that drop over time, and companies and governments have shown themselves able to adjust spending to weaker prices if necessary. The rising US dollar, which has strengthened against the euro by around 10% since the middle of the year, is also contributing to weakness in oil prices when expressed in dollar terms, as our price decks are.
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Friday, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
Supply/demand
Based on a strong second half demand, the supply/balance is forecast to strengthen in 2024 but weaken slightly in 2025 as n ...
Friday, 06 September 24
GLOBAL SEABORNE LNG TRADE HAS CONTINUED TO INCREASE LAST YEAR - BANCHERO COSTA
Global seaborne LNG trade has continued to increase last year, helped also by the events in Ukraine which forced Europe to diversify away from Russ ...
Wednesday, 28 August 24
SEABORNE COAL IMPORTS INTO INDIA INCREASED BY +9.9% Y-O-Y TO 146.6 MLN T - BANCHERO COSTA
Global coal trade has really picked up pace over the past year, and is now fully back to pre-Covid levels said Banchero Costa Research in its lates ...
Tuesday, 06 August 24
EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
A new study from the Massachusetts Institute of Technology (MIT) has thrown a spanner into the plan to transition ships from diesel fuel to ammonia ...
Friday, 02 August 24
ENERGY MARKET DEVELOPMENTS: COAL AND NATURAL GAS PRICES REACH RECORD HIGHS - WORLD BANK
The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
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- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Australian Coal Association
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Cement Manufacturers Association - India
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- PTC India Limited - India
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Deloitte Consulting - India
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- Videocon Industries ltd - India
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Central Java Power - Indonesia
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Bharathi Cement Corporation - India
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