IMO2020 grade fuel garners range of price predictions. File image/Pixabay.
The price of IMO2020 grade bunker fuel may not be as high as expected, an oil analyst has said.
Phillips 66 marine strategist Simon Newman cites two reasons to back up his view, according to price reporting agency Argus Media.
More crude could be availabe to the oil market next year which would mean lower crude values and, by inference, a lower price tag for 0.5% sulfur fuel oil.
The other factor highlighted by Newman is lower global economic growth. If that happens, diesel demand would be weaker which in turn would reduce the upward pressure on marine gasoil prices.
"Maybe in a year's time, all else [being] equal, we end up paying a little more than $100 a metric tonne more than we are today for 3.5[% sulphur]," Newman was quoted as saying by Argus at an industry event.
Newman is not alone in his bearish take on IMO2020 grade fuel prices.
Russian refined products trader Imtrade, which is active in the Far East bunker market, has pegged the premium at $100/mt over high sulfur fuel oil.
However others remain more bullish, with one observer putting the premium close to $400/mt.