Thursday, May 17, 2018

New Shipping Regulations to Push Oil Prices to $90 by 2020 : Morgan Stanley

New Shipping Regulations to Push Oil Prices to $90 by 2020
International efforts to reduce air pollution has lifted the hopes of oil traders, as new shipping regulations are expected to boost demand for lower sulfur fuels, raising demand for crude, as the bank’s analysts report. The current growth in oil prices already exceeds earlier predictions amid OPEC supply cuts and US sanctions against Iran.

Morgan Stanley’s report predicts that the Brent price will reach $90 per barrel by 2020 as demand for crude oil skyrockets by 1.5 million barrels a day, supported by the new shipping rules.

In less than two years, new regulations from the International Maritime Organization, designed to curb air pollution, are to come into force. They require that vessels are either equipped with filters or use cleaner fuel with less sulfurs. As the analysts expect that the majority of shippers will prefer the latter option, the consumption of middle distillate fuel, such as diesel and marine gasoil will increase, thereby pushing the demand for oil higher, dragging crude prices up.
 [sputniknews.com]
 17/5/18

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