|Day's Range||53.35 - 53.73|
(Bloomberg) -- Follow Bloomberg on LINE messenger for all the business news and analysis you need.The global collapse in coal prices this year has dealt a particularly heavy blow to miners in Indonesia, the top exporter and one of the largest producers of the fuel.Bonds from the country’s financially weak miners have suffered more than peers elsewhere in Asia due to a lack of diversification and state backing that many competitors enjoy. Prices of thermal coal -- the kind burned by power plants -- have slumped about 30% this year, and at least four U.S. firms have gone bankrupt.As some lenders look to stop financing coal power plants and investors are under more pressure to “go green,” companies that mine or use coal are left with fewer funding options.“Among the Indonesia coal names, some are facing severe stress,” said Bharat Shettigar, head of Asia ex-China corporate credit research at Standard Chartered Plc. “If prices stay depressed for the next 12 to 18 months, there could be restructuring of some U.S. dollar bonds in the Indonesia coal sector.”Bonds sold by Indonesia coal miners Geo Energy Resources Ltd., PT ABM Investama and PT Bumi Resources have slumped in the past six months.Geo Energy Resources, which has operations in Kalimantan, faces a potential early redemption of its bonds in April 2021 if it fails to meet certain minimum coal-reserve conditions.That will be a “crucial liquidity point” for the company, according to Trung Nguyen, analyst at Lucror Analytics.Geo Energy said by email that its cash balance was $199.6 million as of June 30, and it only needs to generate $100 million from its mines in three years to repay the $300 million bonds due in October 2022.The company needs a minimum 120 million tons of coal reserves to prevent early redemption, and had around 78 million tons as of June 30 and a proposed acquisition of mines will bring the total to 109 million tons, it said.ABM Investama was cut to B+ by Fitch Ratings earlier this year, reflecting its weakening business profile due to the loss of coal mining contracts with one of its customers, while Bumi Resources’ first-half net income fell by 47%.Coal InvestmentABM Investama will be able to repay and refinance its bonds, and the company is focusing on cost reductions and operational efficiencies across the value chain, Adrian Erlangga, director at the company, said by email. He said he expects coal prices will increase in the long term because investments to build coal-fired power plants are outpacing those for new coal mines.Bumi Resources expects its coal sale volume to increase to 87 to 90 million tons in fiscal 2019 from 80.3 million tons the previous year, said Dileep Srivastava, a director at the company. He said demand for the fuel is rising sharply in India while demand in Asia is normal.A push among governments and large companies to shift to renewable power poses a threat to fossil fuels such as coal.“Investors are starting to ask questions about the long-term prospects for thermal coal miners,” said Paul Lukaszewski, head of corporate debt for Asia and Australia at Aberdeen Standard Investments.\--With assistance from Jasmine Ng and Ramsey Al-Rikabi.To contact the reporters on this story: Denise Wee in Hong Kong at email@example.com;Fathiya Dahrul in Jakarta at firstname.lastname@example.orgTo contact the editors responsible for this story: Andrew Monahan at email@example.com, Ken McCallumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Saudi Arabia should give up trying to manage the global crude market and return to the pump-at-will policy it briefly adopted in 2014 under its longest serving oil minister Ali Al-Naimi.In the mercantilist world in which we now live, where decisions are based on narrow national interest, it makes no sense for the world's lowest-cost oil producer to subsidize shale and prop up other high-cost suppliers.Of course when it does, oil prices will crash just as they did in 1986 when the country finally abandoned fixed official selling prices. And then, in the aftermath, global investors will get in a flap about all things Saudi: the IPO of the kingdom’s state oil company, the financing required to fund a young and under-employed population, Mohammed bin Salman’s ambitious Vision 2030 plan to transform the economy away from its dependence on oil.Despite the risks, it’s time to admit that market management is failing, even though Saudi Arabia and it “allies” say that it isn’t.The OPEC+ agreement was meant to drain excess stockpiles in six months. But we are now approaching a fourth year of Saudi Arabia leading a global alliance of producers in trying — and failing — to push up oil prices in a sustainable way.For a while it appeared that the cuts were having the desired effect. Inventories came down and Brent prices rose from about $45 a barrel in June 2017 to reach a high of $86 in October 2018. But they swiftly fell back towards $50 and a second round of cuts that began in January has failed to keep them above $60. Even the temporary loss of more than half of Saudi Arabia’s oil production — and most of the world’s spare capacity — in an attack on two of the kingdom’s biggest processing facilities failed to lift prices for more than a few days.The latest data from OPEC itself — along with the International Energy Agency and the U.S. Energy Administration — show the failure of the policy. All three see global oil inventories building in the first half of next year in the face of what is starting to look like America's forever trade war. The global gridlock has also prompted a reduction in forecasts for growth in oil demand this year and next. The average level of Saudi oil production in the first eight months of 2019 was the lowest since 2014 — even excluding the dip caused by the Sept. 14 attacks on the kingdom’s oil processing infrastructure. And it will have to come down further next year if the kingdom wants to continue trying to manage the market.Meanwhile Russia, the kingdom’s leading partner in the OPEC+ group of countries that came together to manage supply, has seen its output continue to rise each year, even as it has come to dominate OPEC+ policymaking.Saudi Arabia should let American shale drillers take the strain. After all, aren't they the producers of the marginal barrel of crude now? As long as Saudi Arabia and its cohorts continue to restrict output and subsidize shale they are merely delaying an answer to the question.It’s time to discover a true price of oil.Saudi Arabia will learn to work with this over time, just as it did after 1986. And it will probably find that that price isn’t as low as the kingdom fears. Eventually, shale producers will be forced to cut back — or they won’t.If they are forced to cut, then Saudi Arabia will get the price support it craves, without having to lower its own output. But if shale production can just keep going up and up, even in a lower-price environment, then it proves just as emphatically that the Saudi-led policy of market management is a busted flush anyway.Will they do it? I doubt it.Current oil minister Abdulaziz Bin Salman sees it as his job “to ensure that the oversupply doesn’t continue.” December’s OPEC and OPEC+ meetings will likely yield the promise of further output cuts and Saudi Arabia will pump even less next year in a vain attempt to prop up prices. But it would be nice to believe that they are capable of change.To contact the author of this story: Julian Lee at firstname.lastname@example.orgTo contact the editor responsible for this story: Melissa Pozsgay at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Julian Lee is an oil strategist for Bloomberg. Previously he worked as a senior analyst at the Centre for Global Energy Studies.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
EIA inventory data showed a buildup of 104 Bcf (billion cubic feet) in natural gas inventories. The EIA reported the natural gas inventory on October 17.
Given the current upside momentum, the next upside target into the close is .6863. The AUD/USD could pause at this price, but also accelerate into .6879. This is the last potential resistance angle before the .6895 main top.
The main trend is down, but momentum has been trending higher since October 11, following the formation of the closing price reversal bottom at $2.388. Look for an upside bias on a sustained move over $2.478, and for an acceleration to the upside if buyers can take out $2.564 and $2.568. A downside bias will develop if $2.478 fails.
While most of the financial have beat the street, technology shares have been less upbeat. IBM reported earnings on Wednesday after the closing bell that were weaker than expected while Netflix beat but the number of new users missed expectations. CSX reported better than expected earnings and painting an upbeat picture of the US economy.
Oil prices edged lower on Friday, as concerns about China's economy outweighed bullish signals from its refining sector, but losses were limited on hopes for progress toward a U.S.-China trade agreement. Benchmark Brent crude oil futures fell 49 cents to settle at $59.42 a barrel. U.S. West Texas Intermediate (WTI) crude futures lost 15 cents to settle at $53.78 a barrel.
The Trump administration has been in the middle of a constant battle between farmers and the oil industry over the ethanol market, and both sides are fed up of the President’s broken promises
The crude oil markets went back and forth during the trading session on Thursday, as we have gotten the inventory figures out of the way. There is structural support underneath, so it does look like the buyers are still around.
A palm oil industry watchdog will adopt rules next month that will impose fines on consumer goods companies like Unilever and Nestle if they don't start buying more green palm oil to help curb deforestation in Southeast Asia, the regulating body said. Producers of palm oil, a commodity used in everything from ice cream to lipstick, are blamed for destroying millions of hectares of forest in Southeast Asia, in part by using slash-and-burn techniques that blanketed Singapore, Malaysia and Indonesia in smog in September. The growers, though, say palm oil buyers like Unilever , Nestle , Procter & Gamble Co and PepsiCo share responsibility because they don't buy enough sustainably produced oil, undermining efforts to reward those who adopt greener practises and reduce deforestation.
The American Petroleum Institute has estimated a major crude oil inventory build of 10.45 million barrels, nearly 8 million barrels more than estimated
Natural Gas is coming up against increasingly strong resistance from environmental activists and the public in general, leading some to question whether it will face the same fate as coal
An Iranian National Security official claims to have evidence that Saudi Arabia, Israel and the U.S. were responsible for the attack on Iran’s oil tanker
(Bloomberg) -- A fire at a San Francisco-area fuel terminal is contained after spewing black smoke high in the air, snarling rush-hour traffic and prompting officials to ask residents to take shelter.Authorities are working to assess any health threat from the fire that affected two tanks at NuStar Energy LP’s Selby Terminal in Crockett, about 25 miles (40 kilometers) northeast of San Francisco, the Contra Costa Country fire department said on Twitter. The tanks held “very low volumes of ethanol” comprising less than 1% of their capacity, NuStar said.All operations have been suspended, and product shipments in and out of the facility are halted. All personnel are safe, the company said.NuStar’s shares fell 0.8% to $28.11 at 2:59 p.m. in New York on Wednesday.An order for residents to remain indoors has been lifted for all affected areas near the NuStar facility, the Contra Costa County Health Department said in a tweet. Since there is no longer any imminent danger to the public, a section of Interstate 80 near the terminal that had been closed in both directions has now re-opened, the California Highway Patrol said in a tweet.The blaze came less than a day after an earthquake forced Marathon Petroleum Corp. to shut units at its nearby Martinez refinery, threatening to push up gasoline prices that had just eased from the highest level in seven years. Disruptions at California refineries sent retail pump prices in the state well above $4 a gallon.The fire involved two tanks. Three others, holding ethanol and jet fuel, were checked for structural damage, found to be sound and then were vented, Steve Hill, a spokesman for the Contra Costa Fire Protection District, said at a televised news conference on Wednesday.Hill said new, smaller tanks were delivered by NuStar to collect a combination of waste ethanol, water and up to 15,000 gallons of fire-retardant foam from ponds near the burned tanks. He also said the small amount of product in storage had benefited the firefighting effort."We have dodged some bullets in the last 24 hours," Hill said. "Yes, those tanks were almost empty, but that also means they had extra amounts of oxygen inside."Hill said alternate piping was being installed to replace damaged equipment and reconnect the terminal to Northern California oil supply. He said a terminal contractor was briefly trapped in a nearby culvert Tuesday night before he was rescued.The two burned tanks contained a combined 250,000 gallons of ethanol. The blaze had spread to 15 acres of nearby vegetation. Between 12 and 20 nearby residents were evacuated.The incident comes a week after the state’s utility PG&E Corp. shut power to 738,000 homes and businesses to prevent wildfires similar to those that devastated the state last year, causing dozens of fatalities.Phillips 66, whose Rodeo refinery is less than a mile away, has not been impacted, Dennis Nuss, a company spokesman, said Wednesday. NuStar operates about 9,800 miles of pipeline and 74 terminal and storage facilities that store and distribute crude oil, refined products and specialty liquids. Its San Francisco-area facility has a capacity of about 3 million barrels of gasoline, diesel, jet fuel and ethanol, according to the company’s website.(Updates fourth paragraph with share price, seventh paragraph onward with details on the incident.)\--With assistance from Ann Koh, Natnicha Chuwiruch, Bill Lehane and Brian Eckhouse.To contact the reporters on this story: Robert Tuttle in Calgary at firstname.lastname@example.org;Jeffrey Bair in Houston at email@example.comTo contact the editors responsible for this story: David Marino at firstname.lastname@example.org, Jessica Summers, Mike JeffersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The White House is warning Chinese shipping companies against turning off their ships' transponders to hide Iranian oil shipments in violation of U.S. sanctions, two senior administration officials said. "We've been messaging very heavily to the shipping companies, you don't want to do this, it's not worth it," said one official, who spoke to Reuters on condition of anonymity. China is the largest remaining buyer of Iranian oil after U.S. President Donald Trump reimposed sanctions on Tehran's main export.
Investing.com - Oil prices slid further below the $59 a barrel level on Wednesday, pressured by ongoing concerns over the global demand outlook, as energy traders awaited inventory data for fresh insights on the supply side.
Crude oil bounced from its yesterday’s lows, and the oil bulls rebuffed another attempt to move lower earlier today. Does that mean that the upswing can continue now, or a cautious approach would win the day?