Global energy and commodity price reporting agency Argus Media in on Tuesday (4 June) provided a IMO 2020 related update regarding bunker price forecast:
The chances a pending rule to lower sulphur emissions from ships will lead to a spike in oil and diesel prices have decreased, Bank of America said in a new report.
The bank said that slowing economic activity stemming from the US' current trade policy may counterbalance any price effects from the International Maritime Organization (IMO) 2020 sulphur rules, which take effect in January.
The bank, in a report released late last week, said that "the probability of a cyclical upswing" in fuel prices is "quickly dissipating" as the trade war between the US and China escalates.
Bank of America had written in a earlier report that the IMO 2020 rule, combined with other factors including a decrease in OPEC crude production could cause oil and diesel prices to rise.
The company also projects higher marine gasoil (MGO) demand by an estimated 1.1mn b/d in 2020 after the sulphur cap begins and higher consumption at major bunkering hubs such as Singapore and Rotterdam, Netherlands, and Fujairah, United Arab Emirates. Low sulphur MGO only accounts for 5pc of bunker sales in Singapore, the bank said.
"We expect more substantial switching will occur later this year, which will likely require strong bunker hub pricing for gasoil in order to encourage sufficient supply availability," it said.
Source: Argus Media
Published: 6 June, 2019
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