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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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Tuesday, 16 June 20
SHALE SHOCKED - WOOD MACKENZIE
Capturing shut-ins in real time
Oil markets are searching for balance as the world reflects on the impact of the COVID-19 pandemic. ...
Sunday, 14 June 20
INDONESIAN COAL WAS STILL IN DEMAND; A 52,000-DWT SUPRAMAX FIXING DELIVERY CJK FOR A ROUND VOYAGE VIA INDONESIA AT $6,250 - BALTIC BRIEFING
Capesize
The Capesize market made new highs for the year this week after strong iron ore demand to the far east continued to develop in the mar ...
Friday, 12 June 20
CHINA CURBS COAL IMPORTS AFTER 5 MONTHS OF RECORD INFLOWS - SOURCES: REUTERS
China has stepped up customs checks for coal imports, leading to lengthy processing delays at ports, four sources familiar with the matter said, as ...
Friday, 12 June 20
COAL INDIA LIMITED SET FOR MARKETING DRIVE TO CREATE DEMAND - FINANCIAL EXPRESS
State-run miner Coal India (CIL), which is primarily focused on supplying coal to the power sector, is now reorienting its marketing to create dema ...
Friday, 12 June 20
MOODY'S REVISES BRENT OIL PRICE OUTLOOK TO $35/BARREL IN 2020 - TASS
Low oil prices are likely to exert the highest pressure on Iraq, Oman and Kuwait due to the limited space for the fiscal policy pursuit and higher ...
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- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Australian Coal Association
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- White Energy Company Limited
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Planning Commission, India
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Riau Bara Harum - Indonesia
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Economic Council, Georgia
- London Commodity Brokers - England
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- The University of Queensland
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
- Medco Energi Mining Internasional
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
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