EMEA News
IMO2020: Refined Product Already Feeling Impact, Seminar Hears
Among refined products, the impact of the International Maritime Organisation global sulfur cap on bunker fuel will be most keenly felt by that same product, itself a subset of the fuel oil market.
But what of the other products coming out of a barrel of crude oil, how will they fare?
A panel of Platts analysts were tasked with sketching out an answer at the eponymous London Oil & Energy Forum held at the start of International Petroleum Week.
High and low sulfur fuel oil, jet fuel and bitumen all broked a mention during the debate.
"The fuel oil market is beginning to change as the sulfur cap approaches," fuel oil analyst Eleni Pittalis said.
High sulfur fuel oil could feel the squeeze next year most probably in the first and second quarters as by the latter half of the year, ship operators will need to begin to prepare for the change by cleaning out their fuel tanks.
Although 1% sulfur fuel oil is currently oversupplied, refiners are starting to blend the grade down to meet the 0.5% grade, the analyst said.
Jet fuel analyst Caroline Knight said that jet fuel supply could be squeezed as more diesel would be produced for the bunker market.
A question from the floor latched on to the price of bitumen, a product derived from fuel oil. If the price of high sulfur fuel oil falls as it is expected to do, would the price of bitumen follow suit?
Speaking to Ship&Bunker after the seminar, the seminar participant who posed the question, a Bucharest-based trader in bitumen, said it would but probably not by the same margin.
