Very low sulfur fuel, which was a key source of support for refiners in 2020, is likely to see increased supply in 2021, as other transport fuels return to pride of place in the refining slate. This may prove a boon to the shipping sector which faces choppy waters in 2021.
The outlook for 2021 is for output of oil products to increase, although this may follow a jagged trajectory, according to analysts. Higher production of other products means higher production of fuel oil as a byproduct and so presents a bearish prospect fuel oil cracks, Chris Midgley, Global Director for S&P Global Analytics said Nov. 26 at the S&P Global Platts Mediterranean Bunker Fuel and Shipping virtual conference.
Recovery of lighter products may not get under way immediately. The seasonal slowdown in refined product demand in the Northern Hemisphere comes amid COVID-19-related lockdowns, the International Energy Agency said in its monthly report Dec. 15.
The IEA revised its 2021 refining throughput forecast up by 200,000 b/d to 79.1 million b/d on expectations of a stronger recovery in Europe.
As vaccines are distributed through 2021 there are hopes that economic life and travel will rebound and this means higher refinery runs and more of all fuels, including marine fuels…
