World News
IMO 2020 Good for Refiners, LNG: Wells Fargo
Wells Fargo's Roger Read is the latest analyst to suggest the global 0.50% sulfur cap on marine fuel that comes into force on January 1, 2020 will be good new for refiners and liquified natural gas (LNG).
Read's firm has upgraded Phillips 66 and Marathon Petroleum to Outperform as a result, the latter of which "possesses the most potential upside."
While the so-called IMO2020 rule will be troublesome for owners of older, less complex refineries, there is growing consensus it will be a boon for owners of more complex plants, such as those in the US Gulf Coast, that can already produce large amounts of compliant distillate product.
Wood Mackenzie's Alan Gelder recently said such refiners have been handed a licence to "print money."
As for LNG, there is little question it can help shipowners with IMO 2020 compliance but in recent weeks it has come under increased scrutiny for its performance on GHGs.
Even Peter Keller, chairman of LNG bunker advocacy group SEA\LNG, last week said there were "still many open and important questions relating to the global warming implications of methane emissions in natural gas production and transportation as well as methane slippage in marine engines."
But with a "long-term, global goal of lower emissions and clean fuel regulations," Read has added his voice to those backing a strong future for LNG bunkers.
"Given its expanding availability and favorable emissions characteristics, we see LNG increasing its market share in both the near and longer-term as a marine fuel," he says.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 649.50 | 2.00 | 778.50 | 8.50 |
| Rotterdam | 602.00 | 0.50 | 748.00 | 6.00 |
| Houston | 624.00 | 5.00 | 792.00 | 3.50 |
| Fujairah | 649.50 | 2.00 | 898.00 | 3.00 |
| Global 20 Ports Average | 662.00 | 2.00 | 855.00 | 1.50 |
| Global 4 Ports Average | 631.00 | 1.00 | 804.00 | 0.50 |
| Global Average Bunker Price | 717.50 | 0.50 | 913.50 | 1.00 |
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