VGO

The Transition to VLSFO

Twenty-one months ago seems an eternity given the challenges the world now faces yet the writer clearly recalls sitting on a trading floor and hearing excited chatter that enquiries were being received for VLSFO. The writer has to say he gave a little sigh of relief to think that buyers were indeed proactively planning for what many of us will ultimately define as one of the biggest challenges within the industry and our careers, the IMO 2020 changeover, reports Integr8 Fuels.`

Short term...

https://mfame.guru/the-transition-to-vlsfo/

USCG Refiners Cite ‘Compatibility Issues’ With Fuel Blending

  • A dip in aviation demand has cut jet fuel prices low enough for blending into marine fuels.
  • Jet fuel is more likely being used in US Gulf coast refineries as cutterstock, a light petroleum stream blended to reduce viscosity.
  • LSFO production requires blending lower-viscosity material with high-viscosity residual fuel oil to meet the minimum viscosity specification shipowners.
  • Technical difficulties, low jet fuel prices and resurgent shipping demand have inverted the typical pricing relationship...

https://mfame.guru/uscg-refiners-cite-compatibility-issues-with-fuel-blending/

Marathon Predicts A Step-by-step Approach To Achieve Diesel Margins

  • Marathon operates 16 refineries with a capacity of 3 million barrels a day.
  • The sulfur content of 3.5% is far more than the IMO 2020 regulation of 0.5%.
  • VLSFO was approximately $487 per metric ton.
  • U.S. Gulf Coast diesel and dated Brent exceeded $20 per barrel.
  • VLSFO is a product that is largely made by blending an intermediate product called VGO.
  • Marathon has taken about 40,000 to 50,000 barrels per day of VGO to make VLSFO.

According to an article published in Yahoo Finance, the relative...

http://mfame.guru/marathon-predicts-a-step-by-step-approach-to-achieve-diesel-margins/

Diesel Prices Witness a Marked Increase as IMO2020 Approaches

  • Fuel switching due to IMO 2020 will drive a large and sudden shift in demand for diesel in shipping.
  • Fitch predicts the move to MGO is due to the cost, compatibility and regulatory issues associated with conversion to low sulphur fuel oil blends and the installation of scrubbers.
  • Fitch’s report did not account for the price increases, but anticipates a “spike” in the general cost of diesel due to the maritime rules.

Diesel prices will could increase dramatically due to upcoming implementation...

http://mfame.guru/diesel-prices-witness-a-marked-increase-as-imo2020-approaches/

IMO Change Determines the Fate of Crude Markets

PBF Energy Heavy refiners predicts a lag in the crude markets owing to IMO change, reports Argus Media.

The company still expects to take advantage of cheaper sour feedstocks in the second half of the year as the global marine fuels market moves to a lower-sulfur standard.

Shift to lesser Sulfur emissions

The International Maritime Organization (IMO) will require on 1 January 2020 that marine fuels move to 0.5pc sulfur emissions, down from the current 3.5pc sulfur.

US complex refiners such as PBF...

http://mfame.guru/imo-change-determines-the-fate-of-crude-markets/

Galp’s IMO Refining Margins To Expand

  • Galp expects its refining margins to improve in the second half of this year with increased demand for marine fuels supporting crack spreads for middle distillates.
  • Firm cut estimate for average refining margins in 2019 to $4/bl from $5-6/bl previously after a difficult Q2.
  • Galp cut crude runs at its 330,000 b/d of refining capacity to minimise the impact of historically weak crack spreads for gasoline over the period. 
  • Processed 252,000 b/d of crude in Q2, down by 13pc year on year, and...

http://mfame.guru/galps-imo-refining-margins-to-expand/