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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, 25 September 14
LACK OF COAL BUSINESS PUSHING DOWN PANAMAX EARNINGS IN PACIFIC
Handy
In the Atlantic we see rates steady climbing upwards. More coal cargoes out of USG and USEC are helping the TA market which is up some USD ...
Wednesday, 24 September 14
ADARO AGREED TO REDUCE ITS CONCESSION AREA TO 31,379.8 HECTARES
COALspot.com: PT Adaro Energy Tbk (Adaro Energy) today announced that, PT Adaro Indonesia (AI), its wholly owned subsidiary, entered into a M ...
Wednesday, 24 September 14
CAPESIZE: ACTIVITY IN BOTH BASINS WAS UNIMPRESSIVE
COALspot.com: The end of the week prior seems to have marked the tone for the days that followed, with the Dry Bulk market giving up a significant ...
Tuesday, 23 September 14
MEDCO TO INCREASE ITS COAL PRODUCTION NEXT YEAR
COALspot.com: PT Medco Energi Internasional is looking to increase its coal production next year, supported by the launch of operations at its Duta ...
Monday, 22 September 14
COAL SECTOR CHAOS - GENESIS TO REVELATION - DIPESH DIPU
COALspot.com: “Let there be light”, intends the government of India but the fuel side of the story paints a blackout. The recent Suprem ...
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- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Siam City Cement - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- PTC India Limited - India
- CNBM International Corporation - China
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Bhatia International Limited - India
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- McConnell Dowell - Australia
- The University of Queensland
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Economic Council, Georgia
- Dalmia Cement Bharat India
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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