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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, 09 June 20
INDIA: COAL IMPORT DROPS BY 20% TO NEARLY 19 MILLION TONNES IN MAY, SAYS REPORT - HINDUSTAN TIMES
The country’s coal import dropped by 20 per cent to 18.93 million tonnes (MT) last month, industry data showed.
The government ...
Monday, 08 June 20
WOOD MACKENZIE: THE INDISPENSABLE OPEC+
Rumours of “the death of OPEC” have been circulating for almost as long as the organisation has existed. Just three years after the car ...
Monday, 08 June 20
CHINA'S COAL IMPORTS FALL NEARLY 20% IN MAY EVEN AS DEMAND RISES - REUTERS
China’s coal imports in May fell nearly 20% compared with a year earlier even as demand recovered at power plants and industrial users, custo ...
Monday, 08 June 20
JUNE 2020 INDONESIAN COAL PRICE REFERENCE HIT US$ 52.98 A TON, ITS LOWEST LEVEL SINCE AT LEAST AUGUST 2016
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Sunday, 07 June 20
A SCRUBBER FITTED 61,000 ULTRAMAX WAS FIXED DELIVERY PHILIPPINES TRIP VIA SOUTH AFRICA REDELIVERY VIETNAM AT $9,500 - BALTIC BRIEFING
Capesize
The small flicker of hope at the beginning of this week has kindled a small fire under the Capesize market. At a paltry $3369 from the ...
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- Posco Energy - South Korea
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Bhoruka Overseas - Indonesia
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Wood Mackenzie - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- The University of Queensland
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Semirara Mining Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Independent Power Producers Association of India
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