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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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Monday, 01 June 20
SUPRAMAX: IN SOUTH EAST ASIA RATES TRADED SIDEWAYS - BALTIC BRIEFING
Capesize
A sober end to the week, with the market seemingly ready for the weekend. After a steady week of rate declines a small flurry of Atlan ...
Friday, 29 May 20
COVID-19: COAL SUPPLY BY CIL TO POWER SECTOR DIPS 22% TO 32 MT IN APRIL DUE TO DEMAND SLUMP - PTI
Over 95% of CIL’s production comes from its 171 open cast mines.
The supply of coal to the power sector by state-owned Coal In ...
Friday, 29 May 20
AUSTRALIA'S NEW HOPE WARNS OF HIT FROM COAL PRICE SLUMP - REUTERS
Australia’s New Hope Corp Ltd said on Thursday that a sudden drop in thermal coal prices and lower output from its Queensland operations woul ...
Friday, 29 May 20
GOVT MAY LAUNCH COAL BLOCKS AUCTION PROCESS UNDER COMMERCIAL MINING ON JUN 11 - PTI
The Centre is likely to launch the process of coal blocks auction under commercial mining on June 11 and around 50 mines are expected to go under t ...
Friday, 29 May 20
KOMIPO ON BEHALF FIVE KOREAN GENCOS INVITED COAL BIDS FOR 5,700 & 4999 NCV COAL FOR AUGUST 2020 LOADING
COALspot.com: South Korea’s Korea Midland Power Co.,Ltd (KOMIPO) on behalf five (5) Korean Gencos has Issued an International Tender for tota ...
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- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Minerals Council of Australia
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
- White Energy Company Limited
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- India Bulls Power Limited - India
- ASAPP Information Group - India
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Videocon Industries ltd - India
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