A surging differential for Western Canada’s benchmark heavy crude has traders and analysts wondering if predictions that tighter sulfur requirements for marine fuel will devalue the country’s oil assets are overblown.
“Nobody is talking about IMO 2020 anymore,” one trading director at an investment bank in Calgary said, referring to the International Maritime Organization’s January 1, 2020, global deadline to comply with a 0.5% sulfur standard. The limit is currently 3.5%.
Market participants say a lot has changed since early forecasts suggested the IMO 2020 change would significantly devalue the Western Canadian Select blend due to its high sulfur content.
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