Stefka Wechsler of global energy and price reporting agency Argus Media on Wednesday (19 February) issued an assessment of VLSFO demand vis a vis MGO in the U.S. market since IMO 2020:
Traders and suppliers estimate that US demand for very-low sulphur fuel oil with 0.5pc sulphur (VLSFO) is higher than demand for marine gasoil (MGO) as sales for both fuels rise in the wake of global emissions regulations.
The International Maritime Organization (IMO) regulation that took effect on 1 January effectively capped bunker fuel sulphur content at 0.5pc from 3.5pc, leaving VLSFO and MGO as the most viable options for vessels without scrubbers. US sales of high-sulphur resid have been mostly replaced by VLSFO sales, as VLSFO sells at a discount to MGO. The Argus-assessed Houston VLSFO–MGO discount averaged $48/t for 3-18 February.
US marine fuel sellers estimate VLSFO at 57-62pc of US total marine fuel demand since the start of the year, with MGO at 33-38pc and high-sulphur residual fuel oil at 5pc. By comparison, the latest US Energy Information Administration (EIA) data for 2017 and 2016 shows that MGO accounted for 26-30pc (or 5.81mn-6.5mn t) of total demand with high-sulphur residual fuel oil at 70-74pc (or 15.48mn-16.51mn t). As of the start of 2020, high-sulphur resid can only legally be used by vessels outfitted with scrubbers, which account for about 10pc of the global vessel fleet.
As individual US ports do not publish bunker sales data by type of fuel and EIA marine fuel sales data lags two years behind, the current demand split among VLSFO, MGO and high-sulphur residual fuel oil is based on information from sellers.
The EIA’s latest figures showed that the US sold 22.32mn t of marine fuel in 2017. Estimating that US marine fuel sales are at the same 22.32mn t this year, and taking into account seller estimates for marine fuels demand, sales of VLSFO in 2020 could range from 12.7mn-13.8mnt, MGO from 7.4mn-8.5mn t and high-sulphur resid at about 1.1mn t.
Photo credit and source: Argus Media
Published: 20 February, 2020
The representative was providing clarification to a query from Manifold Times when asked if the bunkering licenses of the Hin Leong Trading affiliated company have been permanently revoked.
Patrizia Cosulich becomes first bunker tanker in Singapore to undertake its Mass Flow Meter extension test using the Master Mass Flow Meter, learns bunkering publication Manifold Times.
Bunker claims totalling SGD 628,000 for 88 deliveries of marine gas oil between the period of 7 February 2020 until 15 April 2020, according to documents obtained by Manifold Times.
Event welcomed over 1,100 attendees from 42 countries; delegates visited virtual booths about 4,800 times; while around 5,800 connections were made, according to data from organiser Informa.
Bunker suppliers and bunker craft operators may choose to carry out meter verification using either existing MIMO method OR with the use of a Master Meter.
Pai Kheng Pheng of Sentek Marine & Trading Pte Ltd on Thursday (8 October) was ordered remanded for a further week for investigations, AGC spokesperson informs Manifold Times.