Heavy bunker sales drop 39pc by 2020: EIA

  • Market: Oil products
  • 04/15/15

US residual fuel oil sales for bunkering decline 39pc from 91mn bl in 2013 to 56mn bl in 2020 in the latest Energy Information Administration outlook.

In its Annual Energy Outlook 2015 released on Tuesday, the EIA says US heavy bunker sales will remain at 57mn bl per year from 2025 to 2040. The agency takes into consideration upcoming marine fuel regulations, including expectations he International Maritime Organization (IMO) will reduce the sulphur limit of marine fuels burned in international waters from 3.5pc to 0.5pc.

The implementation date of either January 2020 or January 2025 has not yet been decided. It will be determined in 2018 following an IMO feasibility study. As a result of the sulphur content drop, distillate fuel demand for bunkering will displace the bulk of the resid bunker demand.

The EIA expects US residual bunker prices in 2013 dollars to average $73/bl in 2020, $84/bl in 2025 and $97/bl in 2030, or 91-92pc the projected price of Brent - $79/bl in 2020, $91/bl in 2025 and $106/bl in 2030.

US residual fuel oil use for electric power generation will decline from 33mn bl in 2013 to 13mn bl in 2020 and then stay flat at 14mn b/yr from 2025 through 2040 in the latest EIA outlook. Residual burn for electric power generation will continue to be replaced by natural gas and renewable energy. By contrast fuel oil use for industrial power generation will increase from 10mn bl in 2013 to 16mn bl in 2020 and up to 22mn b/yr during the period 2025 to 2040, according to the outlook. The increase reflects increases in industrial power generation demand and projected decline in metallurgical coal consumption.

si/cm/pg



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