The European fuel oil market was shakenS by news that the Trump administration may strive to stagger the adoption of the International Maritime Organization’s 0.5% marine sulfur cap set to begin on January 1, 2020, sources said.
The US was concerned that fuel costs will spike, the Wall Street Journal reported.
“Trump’s comments smashed the hi-lo in the paper market,” a broker said.
“He is talking about dealing with the IMO sulfur cap in a more gradual fashion, so maybe the premiums will not be so steep.”
The 2020 hi-lo fuel oil swap was offered at $99/mt on ICE during the morning, having been assessed at $103.25/mt on Thursday by S&P Global Platts.
The 2019 contract was heard in a spread of $32-$35/mt OTC, traders said, from a $37.50/mt assessment Thursday.
“We have seen [Trump] pull out of bigger things,” a fuel oil trader said.” [IMO 2020] is big to us as it is our world as such, but in comparison to the other deals he has pulled out of I think it is in keeping.”
The sulfur cap in global marine fuel will be cut to 0.5% from 2020 from 3.5% currently, the IMO — a UN body — has ordered.
Source: PlattsPrevious Next
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