EMEA News
Euronav: LSFO Play Maintained Quality
Tanker operator Euronav, which stocked up on low sulfur fuel oil prior to the IMO2020 switchover 0.5% sulfur fuel oil, is mulling its options on the fuel it has in floating storage.
The company bought 420,000 metric tonnes of low sulfur fuel oil in 2019 of which it has used around half of that, company executives were quoted as saying in a Motley Fool first quarter earnings call transcript.
However, they noted that the impact of Covid-19 on demand had pushed the price of LSFO below the purchase point of the tanker firm.
The company is using small amounts from the fuel stored on its tanker Oceania while waiting to see what happens in the market.
It said that the value of the stock had climbed back from previous lows although it had yet to pass the point at which the company acquire it. The price has risen from the loss reported at the end of the first quarter. Whether it would climb further was unclear and while its fuel procurement strategy might lead to a paper loss it wouldn't be a large one, it said.
The company pointed out that the move to build up stocks of low sulfur material was also about maintaining the quality of the product. "The game plan was to assure quality," chief executive Hugo De Stoop said in the transcript.
