• 5 hours UK On Track To Approve Construction of “Mini” Nuclear Reactors
  • 9 hours LNG Glut To Continue Into 2020s, IEA Says
  • 11 hours Oil Nears $52 With Record OPEC Deal Compliance
  • 14 hours Saudi Aramco CEO Affirms IPO On Track For H2 2018
  • 16 hours Canadia Ltd. Returns To Sudan For First Time Since Oil Price Crash
  • 17 hours Syrian Rebel Group Takes Over Oil Field From IS
  • 3 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 3 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 3 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 3 days Schlumberger Warns Of Moderating Investment In North America
  • 3 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 3 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 4 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 4 days New Video Game Targets Oil Infrastructure
  • 4 days Shell Restarts Bonny Light Exports
  • 4 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 4 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 4 days British Utility Companies Brace For Major Reforms
  • 4 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 4 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 4 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 5 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 5 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 5 days Rosneft Signs $400M Deal With Kurdistan
  • 5 days Kinder Morgan Warns About Trans Mountain Delays
  • 5 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 5 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 5 days Russia, Saudis Team Up To Boost Fracking Tech
  • 6 days Conflicting News Spurs Doubt On Aramco IPO
  • 6 days Exxon Starts Production At New Refinery In Texas
  • 6 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 6 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 6 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 7 days China To Take 5% Of Rosneft’s Output In New Deal
  • 7 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 7 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 7 days VW Fails To Secure Critical Commodity For EVs
  • 7 days Enbridge Pipeline Expansion Finally Approved
  • 7 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 7 days OPEC Oil Deal Compliance Falls To 86%
Alt Text

Gold Prices Could Spike As India Resumes Imports

Gold purchases in India imploded…

Alt Text

Will Ecuador’s Mining Sector Return To Its Golden Days?

Despite the recent political problems…

Here Are The First Market Reactions in Coal

Here Are The First Market Reactions in Coal

It's no secret the coal market is depressed.

Prices for thermal coal have fallen 50% from their five-year highs. Stock valuations for producers have tumbled--some by as much as 90%.

The question for investors then is: when will it get better?

There have been some swirling undercurrents in that regard. Rumors of production cuts in major producer Indonesia, for example.

But this month we got some of the first substantial news on a potential turnaround. Showing how supply and demand has finally started shifting in the sector.

Particularly in Australia. Where major coal producer BHP Billiton suggested it will cut production from one of its biggest mines.

The firm said it has terminated development work at its Goonyella Riverside mine in Queensland. Canceling contracts for stripping work aimed at expanding output here.

The work stoppage here could have a meaningful effect on supply--given that Goonyella is one of BHP's biggest mines. Producing 12.4 million tonnes for the fiscal year ended June 30, 2013.

The company noted that any output cuts resulting from the move will "be reported in quarterly production reports."

At the same time, reports from the shipping industry show a similar story. With less coal now being sold on international markets.

Platts reports that Panamax-sized coal vessels are shutting down. With low coal prices simply making such shipments unprofitable.

As one trader put it, "Owners are starting to think it's below cost and are anchoring."

Another source observed the effect this might have on the market. Saying that the industry is "looking to find a floor as for some owners we are already at levels below their running costs."

It would thus appear we've reached a point where few players in this market are making profits. And supply is responding accordingly. Historically, that hasn't been a bad time to buy.

Here's to the bottom,

By Dave Forest




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News