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US to be big winner of new IMO shipping rules

The United States is set to be the big winner from new marine fuel rules, trading house Gunvor Group quoted as saying on Wednesday, while rival merchants said the world would not face a shortage of distillates as a result of new rules to cut pollution. The UN’s International Maritime Organisation (IMO) has set new rules that will ban ships from using fuels with a sulphur content above 0.5 percent from 2020, compared with 3.5 percent now, unless they are equipped with so-called scrubbers to clean up sulphur emissions.

The industry has been expecting a sharp rise in demand for cleaner distillates, mainly diesel, at the expense of fuel oil that would become largely redundant. Heavy sour crudes yield much more fuel oil than light, sweet oil that have a maximum sulphur content of 0.5 percent, unless a refinery has advanced equipment.

Saudi Arabia to supply extra oil cargoes to India

Saudi Arabia, the world’s biggest oil exporter, will supply Indian buyers with an additional 4 million barrels of crude oil in November, sources familiar with the matter said on Wednesday. The extra cargoes indicate a willingness by Saudi Arabia to increase crude supply to make up the shortfall once sanctions by the United States on oil exports from Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), start up on Nov. 4.

India is Iran’s top oil client after China, though several refiners have indicated they will stop taking Iranian barrels because of the sanctions. Three of the companies did not immediately reply to an email from Reuters seeking comment.

Shipment delays for newcastle coal cargoes on lingering rail issues

A collision between two coal trains on the Hunter Valley coal railway between Muswellbrook and Singleton on September 26 was causing some overhanging issues to Australian coal shipments at Newcastle port.

This is despite the rail line having reopened to train traffic on October 1 after repairs to 100 meters of track and signaling equipment damaged in the trains collision, rail operator Australian Rail Track Corporation said in an update emailed to S&P Global Platts, last week. Over a week later, one large Australian thermal coal producer was still grappling with the rail issue after effects and had rescheduled some of its Newcastle shipments, sources quoted as saying. Market speculation of a force majeure declaration at Newcastle port by one thermal coal shipper as a result of the lingering rail issues could not be independently confirmed by S&P Global Platts.

South Korean refiners keen to test wide variety of US crudes

S&P Global Platts North American crude benchmark WTI’s consistent discount against its Asian counterpart Platts Dubai may continue to encourage South Korean refiners to test a wide variety of US export grades, with SK Innovation receiving a cargo of White Cliffs crude oil for the very first time in the third quarter.

US-Asia crude flows have flourished ever since the North American producer had lifted a 40-year ban on crude exports in early 2016, but vast majority of the oil meeting Asian demand remains limited to export grades produced from the Permian Basin and offshore US Gulf Coast with easy access to loading terminals.


Australia’s lng exports from gladstone hit eight-month high

Combined LNG exports from the three LNG terminals on Australia’s east coast hit a fresh eight-month high in September, while volumes to the world’s second-largest importer of the fuel, China, fell to a four-month low, data from Gladstone Ports Corporation showed.

A total of 1.77 million mt of LNG was shipped from the Port of Gladstone on the country’s east coast in September, which is up 5 percent year on year and marginally above the 1.76 million mt seen in August, the data showed.

Bunker fuel sales on contract basis to rise approaching 2020

Bunker fuel volumes sold on a contract basis rather than on the spot market are expected to increase as the market’s focus remains firmly on the approaching tighter sulfur regulations. As the International Maritime Organizations Maritime Organization’s global bunker sulfur limit drops to 0.5percent from 3.5percent at the start of 2020, bunker fuel buyers will be looking to try and guarantee supply of their chosen compliant fuel.

Many bunker market participants are already seeing a shift towards more volume being bought on a contract basis rather than on the spot market.

Glencore wins cut to coal carrying costs out of newcastle

Australia’s competition regulator said last Monday the Port of Newcastle must reduce its charges for ships entering the port to carry coal for Glencore , in a big win for the global miner. The Australian Competition and Consumer Commission said Port of Newcastle Operations Pty Ltd (PNO) should cut its current rate by about 20 percent to A$0.61 per gross tonne, backdated to 2016.

Northwest Europe bunker fuel market concern

Limited availability of high sulfur fuel oil in Northwest Europe has kept the barge market in the region backwardated, while weak buying interest for bunkers has shown up a disconnect between the two markets.

Availability of fuel oil in Northwest European has been scarce on a plethora of factors including an active arbitrage to Asia, refinery maintenance and refinery upgrades, and this has been reflected by the backwardated spreads.

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