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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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Thursday, 25 January 24
THE RED SEA ESCALATION IMPLICATIONS ON GLOBAL SEABORNE TRADE - MARIA BERTZELETOU
In recent days, discussions have intensified about the potential impact on the seaborne trade and ton-miles due to the evolving dynamics of market ...
Thursday, 25 January 24
RED SEA SHIPPING DISRUPTIONS KEEP GEOPOLITICAL PREMIUM FOR COMMODITIES - FITCH RATINGS
Shipping disruptions and re-routing away from the Red Sea will maintain the geopolitical premium in the main commodity markets, including for oil a ...
Friday, 19 January 24
INDONESIA TARGETS 710 MLN METRIC TONS COAL OUTPUT IN 2024 AFTER RECORD 2023 - REUTERS
Indonesia, a major thermal coal exporter, aims to produce 710 million metric tons of coal in 2024, its mining minister said on Monday, after postin ...
Friday, 19 January 24
DRUMMOND COLOMBIA COAL OUTPUT ROSE 7.1% IN 2023 - REUTERS
Coal production from miner Drummond’s Colombia operations rose 7.1% in 2023 to 29.5 million metric tons, while exports declined by 2.6% to 27 ...
Friday, 19 January 24
CHINA'S 2023 COAL OUTPUT HITS RECORD HIGH - REUTERS
China’s coal output reached a record high in 2023, data from the statistics bureau showed on Wednesday, amid an ongoing focus on energy secur ...
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- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Orica Mining Services - Indonesia
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Petron Corporation, Philippines
- The University of Queensland
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Videocon Industries ltd - India
- Sical Logistics Limited - India
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