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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, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
Coal prices inched up in May (m/m) following an 8 percent decline in 2024Q1. The Australian and South African benchmarks have plummeted more ...
Friday, 26 July 24
FUELEU MARITME IS COMING. IS YOUR CHARTERPARTY READY? - GARD
With less than six months to implementation of FuelEU Maritime in EU and EEA trades, there has been little published advice regarding how to alloca ...
Thursday, 04 July 24
INDIA'S COAL PRODUCTION RISES 14% IN JUNE - PTI
The country’s coal production rose by 14.49% to 84.63 million tonne (MT) in June. The country’s coal output was 73.92 MT in June last f ...
Tuesday, 02 July 24
NTPC CAPTIVE COAL OUTPUT GROWS 15% IN Q1; DESPATCH RISES 17%
State-owned NTPC on Monday reported a 15 per cent year-on-year increase in the production of coal from captives mines to 9.862 metric million tonne ...
Friday, 28 June 24
KOSPO INVITED BIDS FOR 400,000 MT OF MINIMUM 4000 NCV COAL FOR FIVE YEARS
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for total 400,000 MT of Low Calorific Value Coal for 5 years starting from July 2024 until ...
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- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Planning Commission, India
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Indian Oil Corporation Limited
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Essar Steel Hazira Ltd - India
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Minerals Council of Australia
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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