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Wednesday, 10 June 20
OPEC+ CUTS EXTENSION TO ACCELERATE MARKET REBALANCING - FITCH RATINGS
 Fitch Ratings-London-08 June 2020: The OPEC+ agreement to extend by one month record oil production cuts should accelerate market rebalancing, Fitch Ratings says. This is further supported by a commitment to improve compliance from those countries that were unable to reach full conformity with the cuts.
The OPEC+ countries have made radical production cuts in the stress scenario, but it may be more difficult to reach a consensus when the worst of the crisis is over. And it is unclear whether the recovery in oil prices to date is sustainable. Furthermore, demand and production in non-OPEC+ countries, notably the US, will continue to have a significant impact on the supply-demand balance and prices. We believe that a normalisation of oil inventory built up in 1H20 will take at least several months.
Crude oil prices rose significantly in May and continued to improve in early June, because the surplus has been reduced materially. A price differential between the physical and financial markets has disappeared, pointing to crude oil market tightening. We believe that a stress case scenario with prices falling significantly below USD30/bbl is now less likely. The market is likely to experience a production deficit in 2H20 due to gradually improving demand and reduced supply.
The OPEC+ cuts were the major contributor to market rebalancing. We estimate that the OPEC+ countries reduced production by around 7.5mmbpd in May compared to March. The cumulative OPEC+ cuts should exceed 9mmbpd in June as Saudi Arabia, Kuwait and UAE have committed to cut an additional 1.1mmbpd, while Iraq and Nigeria, which underperformed in May, have promised to improve compliance in June. A resumption of production in Libya, which is not subject to the OPEC+ deal, may increase supply but should be more than offset by additional cuts elsewhere.
Furthermore, production fell in the US as a result both of shut-ins and reduced drilling activity by almost 2mmbpd at end-May compared to March, while Canada cut around 1mmbpd. The number of active drilling rigs in the US declined by 64% compared to the beginning of the year. Production in North America may continue to shrink for a while, but the pace is likely to decelerate due to increased prices. We believe that at USD30/bbl, many producers should be able to stabilise production, while at USD40/bbl or above some would be tempted to increase output, which could limit price recovery.
Estimates suggest crude oil demand increased in May compared to April, and we believe it will improve further from June due to the gradual lifting of lockdown restrictions. Implied oil products consumption in the US improved from a 28% drop in April yoy to a 20% drop in May, driven mainly by increased gasoline consumption (a yoy decline of 25% in May compared to a 44% decline in April), while the consumption of jet fuel remained flat. We believe consumption patterns are similar in Europe, while demand in China bottomed out in February.
Demand recovery is now key in achieving balance in the oil market. It could be undermined in the event of a second coronavirus wave and the re-introduction of lockdowns, although it is not our base case. While consumption of gasoline and diesel could recover by the year-end, jet fuel may lag behind as international travel restrictions may remain in place and demand for business travel may be structurally impaired.
Our ratings are informed by companies’ projected performance at end-2021, rather than in 2020, provided their liquidity is adequate, as we rate “through the cycle”. While we may recalibrate our near-term oil price assumptions to the pace of market rebalancing, our ratings already assume that the market will recover gradually; therefore the most recent improvements will not prompt portfolio-wide rating actions.
Source: Fitch Ratings
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Wednesday, 17 June 20
MARKET INSIGHT - INTERMODAL
After experiencing record earnings during the first half of the year, the focus of headlines concerning the tanker market has shifted from the deve ...
Wednesday, 17 June 20
KOREA SOUTHERN POWER CO INVITED 80000 MT OF LOW CALORIFIC VALUE COAL FOR AUGUST 1H, 2020 LOADING
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 Metric Tons (MT) Min 4,200 kcal/kg - Max. ...
Tuesday, 16 June 20
A GLOBAL ECONOMIC SLUMP: WHAT WILL IT MEAN FOR METALS AND MINING? - WOOD MACKENZIE
Back before coronavirus knocked “normal” out cold, the key issues for miners were sub-investment prices, rising requirements for ESG an ...
Tuesday, 16 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.58 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.43 points Monday, up 0.58 percent week on week.
The index, released by China ...
Tuesday, 16 June 20
HIGHER IRON ORE PRICES OFFSET CORONAVIRUS-DRIVEN PRODUCTION RISK - FITCH RATINGS
Lower iron ore production in Brazil, resulting from rising coronavirus infections, should only marginally affect the cash flow of Vale and other gl ...
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Showing 906 to 910 news of total 6871 |
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- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
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