“There will be a huge amount of middle distillates used in the shipping sector starting 2020 with an incremental demand of 1.2mbpd for MGO,” according to WoodMac. Currently, there is demand of about 3.5mbpd for HSFO, which will drop to only about 0.6mbpd in 2020. WoodMac expects the MGO and HSFO price spread to average over $250 per tonne over the next five years, while VLSFO to average $50-$70 per tonne below MGO.
Source:Reuters
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