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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, 18 September 14
INDONESIA'S JULY COAL EXPORT VOLUME DROPPED 5.13% M-O-M
COALspot.com: Indonesia, one of the world's largest coal producer and the global leading multi grade coal exporter shipped around $1.65* ...
Thursday, 18 September 14
PANAMAX : US GULF/CHINA FRONTHAUL ARE NOW PAYING TYPICALLY 14.5K + 450K BB - FEARNRESEARCH
Handy
We still see a firming tendency in the Atlantic and it is still ECSA and USG leading on. USG/Cont now up in about USD 17/18k for a Smax whi ...
Thursday, 18 September 14
ELECTRONIC BILLS OF LADING: A GUIDE TO PAPERLESS TRADING WHICH HAS TAKEN THE SHIPPING INDUSTRY BY STORM
Bimco has recently developed and published a charter party clause that specifically addresses the use of electronic bills of lading. Increasing use ...
Wednesday, 17 September 14
PANAMAX: LIMITED INTEREST IN BOTH BASINS; RISING TONNAGE - INTERMODAL
With the week starting off at a fast pace and with the positive momentum from the previous Friday seemingly sticking around for a bit longer, most ...
Wednesday, 17 September 14
SHIPPING MARKET INSIGHT - GEORGE LAZARIDIS
Since the onslaught of 2013 the rising tide of asset prices had been primarily driven by the increasing freight market conditions and the improving ...
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- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- McConnell Dowell - Australia
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Ministry of Transport, Egypt
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- Planning Commission, India
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- London Commodity Brokers - England
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Economic Council, Georgia
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- The University of Queensland
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
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