Help Desk -
9958816305, 9810335381
Email
Password

IMO2020 Market Uncertainty Brings More Fuel Oil Price Volatility

Logistic News - Published on Mon, 11 Nov 2019

Image Source: bimco
The oil market has remained on edge in recent months with plenty of market volatility to go around. The bunker fuel oil market is normally directly correlated to the developments in the crude oil market, but recently, IMO2020 has added a seemingly disruptive interference with the pricing of bunker fuel on top of it. BIMCO said that the uncertainty of the upcoming IMO 2020 Sulphur cap regulation is having a big impact on the bunker market. Whereas, the price for Marine Gas Oil Low Sulphur has largely remained stable, the price for High Sulphur Fuel oil has been become increasingly more volatile in recent months. The HSFO-MGO LS price spread has, in some ports, widened to levels exceeding the actual price for HSFO.

As people in shipping are painfully aware, in less than two months, shipowners are no longer allowed to burn fuel oil with sulphur emissions above 0.5%, unless a scrubber is working on board. This presents a massive challenge for the industry, where the vast majority of ships are operating on 3.5% HSFO. The implementation deadline has been well-known in the industry for several years, yet, uncertainty is increasingly characterising the market as 2020 creeps closer. Heightened bunker price volatility has become a new normal in the second half of 2019 with the HSFO price in Singapore plummeting 45% in less than a month.

BIMCO’s Chief Shipping Analyst Mr Peter Sand said “The bunker price spread illustrates the tumultuous ride that the bunker market has endured in the last couple of months and similarly, the spread illuminates why the market is filled with uncertainty about the future. From 1 October to 1 November, the spread for HSFO-MGO LS in Rotterdam spread widened 21%, from USD 229 to USD 277 per metric tonne.”

Source :

Posted By : Yogender Pancholi on Mon, 11 Nov 2019
Related News from Logistic segment