World News
IMO2020: Jet Fuel set for Take Off
The impact of International Maritime Organisation bunker fuel rule change could affect the cost of taking a flight.
Once the global sulfur rule on bunker fuel is set at 0.5% in just over a year's time, many ships will switch to distillate thereby increasing pressure on one of three, key refinery outputs.
"Jet fuel is the unintended consequence" of the new maritime regulations, Mason Hamilton, petroleum markets analyst at the US Energy Information Administration was quoted as saying in the Wall Street Journal. "There is a high degree of uncertainty over what is going to happen," the analyst said.
Pricier jet fuel, and refined oil products in general, has prompted the Trump administration to indicate a need to phase in the new regulation.
Refinery output comprises three main grades of product: petrol for cars; distillates including diesel and jet fuel; and fuel oil used by ships and power plants.
Although marine demand for fuel oil will remain, it will be less than before while distillate demand from ships will increase. How this will pan out in terms of product pricing is unknown, a situation which is, in turn, creating uncertainty in the market.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 647.50 | 1.00 | 770.00 | 3.50 |
| Rotterdam | 601.50 | 2.50 | 754.00 | 2.00 |
| Houston | 619.00 | 11.50 | 795.50 | 3.00 |
| Fujairah | 651.50 | 1.00 | 895.00 | 2.00 |
| Global 20 Ports Average | 664.00 | 1.50 | 856.50 | 2.00 |
| Global 4 Ports Average | 630.00 | 3.00 | 803.50 | 2.50 |
| Global Average Bunker Price | 718.00 | 0.50 | 914.50 | 0.50 |
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