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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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Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
Friday, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
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- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- The University of Queensland
- Attock Cement Pakistan Limited
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Thiess Contractors Indonesia
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Planning Commission, India
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- VISA Power Limited - India
- Eastern Energy - Thailand
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Economic Council, Georgia
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