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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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Monday, 24 June 24
PHILIPPINES COAL SUPPLY ENOUGH UNTIL 2030 - PHILSTAR GLOBAL
The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
Friday, 14 June 24
NEXTDECADE, SAUDI ARAMCO SIGN 20-YEAR LNG SUPPLY DEAL - REUTERS
U.S. liquefied natural gas (LNG) provider NextDecade has signed a non-binding agreement with Saudi Aramco 2222.SE to supply 1.2 million tonnes per ...
Friday, 14 June 24
NEWBUILDING PRICES CLIMB 3% TO HIGHEST LEVEL IN 16 YEARS - NIELS RASMUSSEN
“Since the start of the year, newbuilding prices have risen 3% to their highest level since 2008. Compared to their most recent low in late 2 ...
Friday, 14 June 24
INDIA TARGETS HIGHER DOMESTIC COAL PRODUCTION, REDUCED IMPORTS: GOVT - REUTERS
India wants to reduce coal imports and increase domestic production, federal coal minister G. Kishan Reddy said on Thursday.
The cou ...
Thursday, 13 June 24
US LNG TO ASIA FOR POWER GENERATION EXPECTED TO CUT EMISSIONS VERSUS COAL - RYSTAD ENERGY
The value-chain emissions of liquified natural gas (LNG) are lower on average than for coal-fired power generation, even when the fuel is shipp ...
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- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- VISA Power Limited - India
- The Treasury - Australian Government
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- The University of Queensland
- Port Waratah Coal Services - Australia
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
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