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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, 02 June 20
THE HISTORIC DECLINE OF US COAL - WOOD MACKENZIE
The first commercial power plant in the US was Thomas Edison’s coal-fired Pearl Street station in lower Manhattan, which started operating in ...
Tuesday, 02 June 20
COAL INDIA'S MAY SALES DRIVEN SHARPLY LOWER BY SLUMP IN POWER DEMAND - REUTER
Coal India’s sales fell 23.3% in May as utilities refrained from purchases amid record stockpiles and tepid demand because of a nationwide lo ...
Tuesday, 02 June 20
TUAH TURANGGA AGUNG RECORDED 4.54 MILLION TONS OF COAL SALES IN THE FIRST FOUR MONTHS OF 2020
PT United Tractors Tbk through its subsidiary, PT Tuah Turangga Agung recorded 4.54 million tons of coal sales in the first four months of 2020, up ...
Tuesday, 02 June 20
SOURING SINO-AUSTRALIA TRADE RELATIONS - BALTIC EXCHANGE
Cooling relations between the commodity powerhouses of China and Australia may point to trade troubles ahead when the world emerges from the Covid- ...
Tuesday, 02 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.86 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.95 points Monday, down 0.86 percent week on week.
The index, released by Chi ...
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- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- MS Steel International - UAE
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Australian Commodity Traders Exchange
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- PTC India Limited - India
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- White Energy Company Limited
- Thiess Contractors Indonesia
- Timah Investasi Mineral - Indoneisa
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- The University of Queensland
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Deloitte Consulting - India
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
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