EMEA News
MGO Demand Up in St. Petersburg as LSFO Orders Fall Off
Bunker traders in St. Petersburg last week said orders for marine gasoil (MGO) were on the rise as demand for low sulfur fuel oil (LSFO) was falling.
"We stopped seeing inquiries for LSFO volumes," said a bunker supplier on Friday.
"However, demand has picked up for 0.1% marine gasoil in the last few weeks.
"People have started to request over 1,000 mt of marine gasoil for voyages."
MGO is significantly more expensive than LSFO but will enable shippers to meet new, stricter sulfur rules that come into effect on January 1, 2015.
The new rules mean that shippers in Emissions Control Areas (ECA) will be required either to burn fuel with a sulfur contact of no more than 0.10 percent by weight, or use approved alternative methods of reducing SOx emissions by an equivalent amount.
Ship & Bunker data shows 380 cSt LSFO was trading at $268 per metric tonne (pmt) at St Petersburg on Friday while MGO prices have remained steady at $645 pmt since December 1.
There have been some reports that Russian refineries are struggling to meet increasing demand for MGO.
"We have low volumes in our tanks for prompt, but we run out of it quickly and so far supply from refineries is not guaranteed," said the trader.
MGO demand was last month said to be rising across Northwest Europe.
