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ESAI ENERGY IN THE NEWS

IMO 2020 to Challenge Singapore

Hydrocarbon Engineering: ESAI Energy’s recently released ‘Global Fuels 12-month Outlook’ highlights how Asia will bear the brunt of the demand shift caused by the International Maritime Organization’s (IMO) new sulfur cap for shipping fuels in 2020.

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Singapore Faces Challenging Demand Shift from IMO 2020

Hellenic Shipping News: ESAI Energy’s recently released Global Fuels 12-month Outlook highlights how Asia will bear the brunt of the demand shift caused by the International Maritime Organization’s new sulfur cap for shipping fuels in 2020. Asia makes up 40 percent of global bunker demand, with Singapore, China, and Hong Kong accounting for most of that market. At the same time, the relative availability of MGO to LSFO in Asia means that MGO will be a more likely substitute in that market. In other regions, substantial shifts are taking place from HSFO to LSFO. A big shift in demand will move global markets.

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Ship Fuel Change Becomes Refiner Gamble As Heavy Crude Dwindles

Gulf Times: A change in ship fuel that seemed like a sure profit churner for sophisticated refiners a year ago isn’t a clear winner now. When the International Maritime Organisation imposed clean-fuel rules for ships starting in 2020, the popular outlook was that thicker, dirtier crude would plummet in price, as it yields more of the high-sulphur fuel oil that can’t be burned unless ships have special equipment to scrub their emissions. Diesel prices would surge as vessel owners use it as a substitute.

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Demand Not Inventories Should Drive OPEC+ Decision

World Pipelines: As the OPEC+ meeting, now delayed until July 7, approaches, the question of inventory levels will gain considerable attention. As we have written before, we believe global (OECD and non-OECD) crude oil and product inventories are adequate, but not excessive. This month, however, we parse just the OECD stock picture, which will shape impressions of over or under supply before and during the OPEC+ meeting. Although we are not supporters of the five-year average measurement, that approach (when corrected for demand) shows crude inventories are in the middle of the historical range, and product stocks are actually at the low end of the range. We do not believe inventories will or should be justification for further production restraint. But, we are concerned about weak underlying demand growth as discussed in our Global Oil Balance analysis.

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