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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, 20 November 14
MOST MAJOR ASIAN ECONOMIES TO BENEFIT FROM LOWER OIL - FITCH
COALspot.com: The 25% drop in the price of oil since July is likely to lift economic growth prospects, improve terms of trade, and have a pot ...
Thursday, 20 November 14
HANDY: INDO ROUNDS ARE BEING FIXED IN REGION OF US$ 10K - FEARNLEYS
Handy
In the Atlantic we have experienced firmer rates this week much lead by the grain activity out of USG. Vsls open in the USG can achieve in ...
Thursday, 20 November 14
DEMAND FOR DRY BULK CARRIERS INCREASES ON THE BACK OF HEIGHTENED FREIGHT RATE MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners are looking to take advantage of favorable market conditions through the acquisition of more dry bulk carriers. According to shipbroker ...
Wednesday, 19 November 14
INDONESIA FUEL-PRICE RISE A CLEAR, POSITIVE REFORM SIGNAL - FITCH
COALspot.com: Indonesia's hike of more than 30% in administered fuel prices, announced on 17 November, provides a clear, positive signal of the ...
Wednesday, 19 November 14
CAPES WERE UNDER PRESSURE; LOST 20% WITHIN A WEEK
COALspot.com: " The negative environment in which the week prior ended, marked this past week as well, which closed off on Friday noting the f ...
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- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- White Energy Company Limited
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Parry Sugars Refinery, India
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Aditya Birla Group - India
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- Posco Energy - South Korea
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