• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 28 mins Which producers will shut in first?
  • 21 mins The Most Annoying Person You Have Encountered During Lockdown
  • 3 hours Its going to be an oil bloodbath
  • 13 hours We are witnesses to the end of the petroleum age
  • 1 hour Saudi Aramco struggling to raise money for this year's dividend of $75 billion. Now trying to sell their pipelines for $10 billion.
  • 18 hours Breaking News - Strategic Strikes on Chinese Troll Farms
  • 1 day Death Match: Climate Change vs. Coronavirus
  • 2 hours Wastewater Infrastructure Needs
  • 16 hours A New Solar-Panel Plant Could Have Capacity to Meet Half of Global Demand
  • 17 hours >>The falling of the Persian Gulf oil empires is near <<
  • 19 hours Natural gas price to spike when USA is out of the market
  • 21 hours As Saudi Arabia Boosts Oil Output, Some Tankers Have Nowhere to Go
Is Oil Heading To $10?

Is Oil Heading To $10?

As Saudi Arabia continues to…

Why UAE Oil Prices Are Falling

Dubai

Prices of Abu Dhabi’s popular flagship crude grade, Murban, have dropped over the past week as refiners prefer grades yielding more low-sulfur marine fuels and as supertanker freight rates soar while refining margins for gasoil in Asia are below the average for this time of the year.

Last Thursday, Murban, a light crude with API gravity of 40.4 degrees and sulfur content of 0.79 percent, traded at a discount of US$0.15 to its official selling price (OSP), compared to a premium of US$0.25 to the OSP just days before that, according to Bloomberg estimates.

The key reason for the lower buying interest in Murban has been the new rules for shipping fuels which enter into force on January 1, so refiners have turned to grades that can yield more low-sulfur high-viscosity marine fuels, traders and refiners tell Bloomberg.

The rising costs of supertanker voyages between the Middle East and China in recent weeks have also acted as deterrent to some buyers of Murban in Asia, who have been buying more ESPO crude from Russia and grades from the Asia Pacific region.

According to the new rules by the International Maritime Organization (IMO), only 0.5-percent or lower sulfur fuel oil should be used on ships beginning January 1, 2020, unless said ships have installed the so-called scrubbers—systems that remove sulfur from exhaust gas emitted by bunkers—so they can continue to use high-sulfur fuel oil (HSFO).

The new regulation will lead to low-sulfur fuel oil (LSFO) displacing HSFO demand, but the change looks less dramatic now than it did several months ago.

Weeks before new worldwide rules on cleaner fuels for ships enter into force, refiners in Asia finally began to see refining margins for those cleaner marine fuels rising, albeit later than what was expected at the start of this year.

According to refiners and traders in Asia who spoke to Reuters, shipping companies—who had been slow to purchase very low sulfur fuel oil (VLSFO) and marine gasoil earlier this year—have started this month to buy more of those cleaner fuels, creating the demand refiners had expected and driving refining margins up.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage




Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News