Marine Diesel Oil Price-Spike Expected End of 2014

MarineLink.com
Wednesday, March 05, 2014
File picture CCL

Reuters – New fuel rules for ships entering low sulphur zones around northwest Europe and North America next year could trigger a price spike in European gasoil, whilst refiners will struggle to offload unwanted fuel oil.

From January 2015, ships entering "Emission Control Areas" (ECAs) in the Baltic, North Sea and English Channel and around the North American coast, will have to switch from low sulphur fuel oil (LSFO) with 1 percent sulphur content to 0.1 percent gasoil, in a crackdown on marine pollution.

Industry experts believe shipowners will opt for gasoil rather than using exhaust filter systems known as scrubbers or alternative fuels such as liquefied natural gas (LNG), because of high investment costs, long payback times, and the lack of suitable port infrastructure.

Gasoil currently trades at around a $300 premium to LSFO on a flat price basis.

"Most ships will move to marine gasoil in 2015," said David Wech, an analyst at JBC Energy. He sees demand for gasoil growing by 135,000 barrels per day (bpd) in northwest Europe and 105,000 bpd in the United States. Demand for fuel oil will fall by 120,000 bpd and 90,000 bpd respectively.

This could prompt a short-term price spike in gasoil, similar to that in August 2012 when North America's ECA first came into effect, mandating a switch to 1 percent LSFO. Although this was flagged well in advance there was a run on European LSFO from June, peaking in mid-September.

Source: Reuters
 

Maritime Reporter October 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Legal

Belgian Strike to Impact Antwerp Port

A strike in parts of Belgium on Monday is expected to disrupt rail services and one of Europe's largest ports as trade unions and workers voice their anger over

Statoil Halts Angola Exploration, Cancels Rig Contract

Norway's Statoil has halted its exploration campaign in Angola after several disappointing wells and canceled a rig contract with Stena Drilling, the firm said on Friday.

Transas Launches Web Map Service

Transas Marine has launched Transas Web Map Service (WMS)to provide transparent and easy access to navigation charts through common interface. Access to comprehensive

Finance

Cost to Fuel Ships Falls

For a ship that burns 24 tonnes of fuel per day while steaming, fuel costs are reduced by as much as $1 million a year if current price level stay put. Assuming

Asia Tanker, VLCC Rates Could Climb

Charterers to release 30 Middle East VLCC cargoes next week. VLCC market buoyed by upbeat Suezmax, Aframax sectors. Rates for very large crude carriers (VLCCs)

Belgian Strike to Impact Antwerp Port

A strike in parts of Belgium on Monday is expected to disrupt rail services and one of Europe's largest ports as trade unions and workers voice their anger over

Environmental

Environmental Groups: IMO Polar Code Too Weak

The International Maritime Organization (IMO) today adopted the Polar Code aimed at regulating shipping in Polar Regions. Several environmental groups have criticized

Bouchard Vessels Honored by SCA

Forty-three Bouchard Transportation Co., Inc. vessels have been honored by The Chamber of Shipping America (CSA) with Certificates of Environmental Achievement.

Deepwater Semi-Sub COSL Prospector Delivered

COSLProspector, the fourth deep-water semi-submersible drilling rig built by CIMC Raffles for China Oilfield Services Limited (COSL), has been delivered in Yantai, Shandong Province.

Fuels & Lubes

Environmental Groups: IMO Polar Code Too Weak

The International Maritime Organization (IMO) today adopted the Polar Code aimed at regulating shipping in Polar Regions. Several environmental groups have criticized

Cost to Fuel Ships Falls

For a ship that burns 24 tonnes of fuel per day while steaming, fuel costs are reduced by as much as $1 million a year if current price level stay put. Assuming

Belgian Strike to Impact Antwerp Port

A strike in parts of Belgium on Monday is expected to disrupt rail services and one of Europe's largest ports as trade unions and workers voice their anger over

 
 
Maritime Careers / Shipboard Positions Maritime Security Navigation Offshore Oil Pipelines Pod Propulsion Ship Electronics Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0990 sec (10 req/sec)