- The price differential between high and very low sulfur fuel oil would settle at around $100 per metric tonne (pmt) by next year.
- The current $200pmt differential may last a bit longer as the spread of the coronavirus interrupts scrubber installations.
- Bunker market is looking for equilibrium and the wider differential between the high/very low fuel oil grades will probably stick over the coming months.
- Though some of the installations delayed because of the coronavirus, the demand from ships with scrubbers will narrow the differential.
According to a senior oil analyst the price differential between high and very low sulfur fuel oil would settle at around $100 per metric tonne (pmt) by next year, reports Ship & Bunker.
Coronavirus and scrubber installations
Speaking at the Argus Media oil forum in London, senior analyst at JBC Energy, Eugene Lindell, said that the current $200pmt differential may last a bit longer as the spread of the coronavirus interrupts scrubber installations but over the longer term, the market would head towards $100pmt.
“We see the differential averaging at around $200pmt on an annual basis in 2020. By next year, we see the annual average at around $100pmt.”
Scrubber intakes
The bunker market is looking for equilibrium and the wider differential between the high/very low fuel oil grades will probably stick over the coming months.
But the impact of an increase in the take up of scrubbers by ship operators will, ultimately, change the fundamentals.
Lindell said though some of the installations may be delayed because of the coronavirus, the demand from ships with scrubbers will narrow the differential.
Installing scrubbers allows ships to continue to use high sulfur fuel oil but remain in compliance with the IMO2020 sulfur cap.
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Source: Ship & Bunker
