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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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- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Indogreen Group - Indonesia
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Planning Commission, India
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Baramulti Group, Indonesia
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
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