IMO 2020 regulation to support demand for Brent & WTI
Baku, Azerbaijan, Oct.1
By Leman Zeynalova – Trend:
The International Maritime Organization (IMO) Sulphur 2020 regulation could support demand for Brent and West Texas Intermediate (WTI) oil, Trend reports referring to Fitch Ratings.
“In 2020, the coming into force of International Maritime Organization Sulphur 2020 regulation could support demand for Brent and WTI, which are low-sulphur oil grades. The long-term price of $57.5/bbl for Brent takes into account our view on the marginal costs of oil production,” reads a report released by Fitch Ratings.
Fitch assumes an average Brent price to be marginally lower at $62.5 per barrel in 2020 compared to 2019, due to waning demand and increased supply from continued US shale growth and recovered production in Saudi Arabia.
“However, we also expect OPEC+ to manage supply to avoid large surpluses or deficits,” said the report,
The International Maritime Organization (IMO), the 171-member state United Nations agency that sets standards for shipping, is set to reduce the maximum amount of sulfur content (by percent weight) in marine fuels used on the open seas from 3.5 percent to 0.5 percent by 2020.
These regulations are intended to reduce sulfur dioxide, nitrogen oxides, and other pollutants from global ship exhaust.
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