Market Talk: High Price Could Make Feedstock Attractive to Bunker Market

Wednesday December 19, 2018

Fuel oil traders in the US will be looking to sell low sulfur vacuum gasoil (LSVGO) and low sulfur (LS) straight run fuel oil directly into the bunker market in the lead up to 2020, according to Stefka Wechsler, a marine fuels editor with price reporting agency Argus Media.

In recent webinar on the raminifcations of IMO 2020, Wechsler said that some traders expect that the high price for these products will keep them out of the refinery feedstock market therefore opening up a line into the bunker market.

She added that traders are currentlly pricing IMO 2020-compliant 0.5% bunker fuel mid-way between the price points of LSVGO and LS straight run fuel oil.

Argus Media starting publishing price assessments for 0.5% sulfur fuel oil from October with assessments available in Singapore, northern Europe and the US.

As reported by Ship and Bunker earlier this month, analysts have been pondering the role of VGO in the reconfiguring market for refined oil products. Some believe it could act as a swing product between the wider refined product markets and the bunker market post-2020.