According to an oil analyst, low sulfur fuel oil production to meet global bunker demand post-2020, may have a shortfall, reports Ship & Bunker.
LSFO shortfall
The capacity for very low sulfur fuel oil production to meet the gap in global bunker demand,
“post-2020 may have been overplayed,” an oil analyst has said.
Asian refiners
An Asia-focused analyst at Facts Global Energy said that it has been relatively easy for Asian refiners to increase their VLSFO output as regional plants process a lot of low sulfur crude. But when looking at investment in residual desulfurization capacity in the region and abroad, the picture is not so rosy.
Over reading of LSFO production
“The market has tended to over read VLSFO production,” the analyst quoted.
Apart from some small debottlenecking exercises, significant investment in VLSFO production has been absent.
According to the analyst, the differential between high and low sulfur fuel oil will narrow over 2020 from $350-$400/mt early on, to around $300/mt by the end of the year.
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Source: Ship&Bunker
