IMO 2020: Oil markets can deal with 0.5 sulfur change

IMO 2020: Oil markets can deal with 0.5 sulfur change

An oil market analyst sees a smoother-than-expected transition from the International Maritime Organisation’s (IMO) 0.5% sulfur cap on bunker fuel as refiners been anticipating rising global diesel demand.

Global diesel consumption has been rising faster than gasoline for the past 25 years with refiners responding  “by squeezing more diesel and jet fuel from every barrel, mostly at the expense of lower-value products such as heavy fuel oil, bitumen and asphalt”, John Kemp, a market analyst with Reuters, said.

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Oil traders set sights on high seas as diesel renaissance is born

Freight Ship

Diesel is getting a new lease of life as it is one option to meet the new regulations of the global sulphur cap in 2020, and more demand is posed to emerge from the sea. Arun Kumar Sharma, finance director of Indian Oil Corp., the nation’s biggest refiner says that the new regulations for sulphur fuel oil “are definitely good for refiners, especially in Asia. Opening up of new market for gas oil will further improve diesel cracks.”

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