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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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Saturday, 27 September 14
MORE COAL MINERS AGREE TO AMEND CONTRACTS - THE JAKARTA POST
The Energy and Mineral Resources Ministry is in a rush to beat a deadline for the conclusion of numerous memorandums of understanding (MoUs) with t ...
Friday, 26 September 14
INDIA SUPREME COURT RULING TO HIT STEEL, UTILITY EARNINGS, SAYS FITCH
COALspot.com: The 24 September Supreme Court of India (SCI) decision to cancel almost every coal block allocation since 1993 will have a negative f ...
Friday, 26 September 14
U.S WEEKLY COAL PRODUCTION FELL 1.8% WEEK OVER WEEK, SAYS EIA
COALspot.com – United States the world's one of largest coal producers, produced approximately 18.80 million short tons (mmst) of c ...
Friday, 26 September 14
ORACLE SIGNS EPC FRAMEWORK AGREEMENT WITH SEPCO FOR COAL MINE AND POWER PLANT IN PAKISTAN
COALspot.com: Oracle Coalfields PLC, the UK developer of a lignite coal mine and power plant in the south-eastern Sindh Province, Pakistan, has ann ...
Friday, 26 September 14
NEWCASTLMAXES ARE THE MOST SOUGHT AFTER VESSELS BY SHIP OWNERS TODAY SAYS VESSELS VALUE
KNOWLEDGE TO ELEVATE
Determining a ship’s fair value can be a very tricky business, especially when you’re the one paying. As such ...
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- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- IHS Mccloskey Coal Group - USA
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- Samtan Co., Ltd - South Korea
- The University of Queensland
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Transport, Egypt
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- PTC India Limited - India
- Australian Coal Association
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- White Energy Company Limited
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- MS Steel International - UAE
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
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