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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, 22 October 14
CAPESIZE MARKET REMAINED UNDER PRESSURE
COALspot.com: The Dry Bulk market closed on the red for yet another week although following Friday sentiment has started to improve on the back of ...
Tuesday, 21 October 14
INDIA'S DIESEL DEREGULATION POSITIVE FOR OIL COMPANIES - FITCH
The Indian government's 18 October decision to deregulate diesel prices will have a positive effect on the national oil marketing companies tha ...
Tuesday, 21 October 14
LOW DEMAND PUTTING COAL SWAPS UNDER PRESSURE
COALspot.com: Indonesian coal swaps for delivery Q4' 2014 lost on day, week and month.
The swap has lost US$ 1.57 (-3.04%) month on month ...
Monday, 20 October 14
CHINA'S ENVIRONMENTAL POLICIES DO NOT SPELL THE END FOR COAL - WOOD MACKENZIE
China's environmental policies do not spell the end for coal Analysis across energy commodities show coal still accounting for 64% of power mix ...
Monday, 20 October 14
CFR SOUTH CHINA COAL SWAPS FAILED TO PERFORM POSITIVE
COALspot.com: API 8 CFR South China Coal swap for Q4’ 2014 delivery decreased US$ 3.04 (-4.57%) month over month and US$ 1.75 (-2.68%) week o ...
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- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- PTC India Limited - India
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Africa Commodities Group - South Africa
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Minerals Council of Australia
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- Indika Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Thai Mozambique Logistica
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
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