Marine fuel demand seen falling on high prices-study

Global marine fuel demand is falling faster than previously thought as the high price of oil prompts energy efficiency developments in new ships, a study by leading consultants said.

"Ship owners and operators now accept that the prices are likely to remain high and we can expect significant improvements in design efficiency of new-builds, more focus on efficient vessel routing and the development of alternative fuels, including liquefied natural gas," a joint study by Facts Global Energy and Marine and Energy Consulting said.
"The study forecasts that the global market for oil bunkers by 2025 will be about 1.5 million barrels per day, or over 15 percent, lower than anticipated in their previous study, completed in 2008."
Benchmark European high sulphur fuel oil rose to $654.50 a tonne fob on Wednesday from about $425 a year earlier. HFO-ARA
The study also said global marine fuel demand will shift from high sulphur fuel oil with 3.5 percent sulphur content to low sulphur fuel oil with 1 percent sulphur, eventually seeing an increase in use of middle distillates due to tighter environmental regulations.
"A sharp increase in the demand for distillate bunkers can be anticipated in the next few years as the maximum sulphur content in bunkers consumed in an Emission Control Area (ECA) is reduced from 1.00 percent to 0.10 percent from 2015," the study said.
"This will inevitably stimulate middle distillate bunker demand. Prior to this, demand for low sulphur fuel oil is expected to increase when the U.S. and Canada introduce an ECA on their Atlantic and Pacific coasts from August 2012."
Source: Reuters