So what is your take on diesel fuel prices after 2020?

[ShinerBock]

For those that do not know, a few years ago the International Maritime Organization made a significant regulation that will have a big impact on everyone's wallet, especially diesel vehicles owners. They set a new standard for sulfur content in ship diesel fuel that they allow at their ports to .5%S by January 1, 2020. That is a significant drop from the current limit. While this will have an impact on everyone's wallet because this new fuel will be more costlier than current fuel used(which will increase prices on everyday goods), it may end up hurting or helping diesel owners according to some analyst.

Many here may remember when the EPA set the ULSD standard and how it effected diesel prices due to the extra refining and purification needed, and causing "sweet" crude prices to increase even more. For years, on land diesel owners alone had to pay the added cost for all of the added refining equipment and processes since the low sulfur fuel was only for them. Diesel fuel refiners also switched to using more "sweet" crude (that was only previously used to make gasoline) due to its lower sulfur content versus less expensive "sour" crude it used before causing the demand(and price) for "sweet" crude to increase.

There are people on both sides of this argument. Some are saying it will cause both diesel and gas prices to skyrocket because it would cause the demand for "sweet" crude to increase even higher. Others are saying that it will cause on road diesel prices to go down because now shipping will also be paying for the added refining processes spreading out the cost for the added piping and other equipment needing to purify "sour" crude.

What is your take on it?

[wilber1]

Jet fuel not mentioned here. Jet A-1, the most common is very similar to diesel and can be used in diesel engines not requiring ULSD.

We did an Antarctic cruise a few years back. Only low sulphur diesel was allowed past 60 degrees south latitude.

[DirtyOil]

Grit dog wrote:
Lotsa wrong info in this thread. Most of the worlds transoceanic diesels still run off bunker fuel which actually is .5% sulfur/5000ppm. Only around the US is it limited to 1000ppm.
And bunker fuel is still like $1 a gallon but prices are rising with oil prices. It sure ain't sweet crude though.

and more misinformation.... There is category 2 and 3 "marine" fuels, 15ppm (ULSD) became the limit for locomotive and marine use in June 2012.

Category 3 marine fuel went to 1000ppm in 2015, from 10,000ppm in 2010. Canada and the US applied a limit of 1000ppm along their shorelines, that's means any shipping from Canada and/or the US, along with any international marine use fuel a limit of 1000ppm, for category 3 marine fuel.

all arguments aside... we are regardless heading in the right direction in reducing sulphur and sulphur dioxide (acid rain) which is a WIN WIN!

[DirtyOil]

FishOnOne wrote:

DirtyOil wrote:

ShinerBock wrote:
For those that do not know, a few years ago the International Maritime Organization made a significant regulation that will have a big impact on everyone's wallet, especially diesel vehicles owners. They set a new standard for sulfur content in ship diesel fuel that they allow at their ports to .5%S by January 1, 2020.They set a new standard for sulfur content in ship diesel fuel that they allow at their ports to .5%S by January 1, 2020. That is a significant drop from the current limit. While this will have an impact on everyone's wallet because this new fuel will be more costlier than current fuel used(which will increase prices on everyday goods), it may end up hurting or helping diesel owners according to some analyst.

Many here may remember when the EPA set the ULSD standard and how it effected diesel prices due to the extra refining and purification needed, and causing "sweet" crude prices to increase even more. For years, on land diesel owners alone had to pay the added cost for all of the added refining equipment and processes since the low sulfur fuel was only for them. Diesel fuel refiners also switched to using more "sweet" crude (that was only previously used to make gasoline) due to its lower sulfur content versus less expensive "sour" crude it used before causing the demand(and price) for "sweet" crude to increase.

There are people on both sides of this argument. Some are saying it will cause both diesel and gas prices to skyrocket because it would cause the demand for "sweet" crude to increase even higher. Others are saying that it will cause on road diesel prices to go down because now shipping will also be paying for the added refining processes spreading out the cost for the added piping and other equipment needing to purify "sour" crude.

What is your take on it?

You know 0.5% is 5000ppm.... that's a lot of sulphur!! In Canada we have been producing and selling ULSD since 2010 which has a sulphur content of equal or less then 15ppm or 0.0015% except for rail and marine. But since most of our refineries are producing ULSD even the rail and marine fuels are already ULSD. Any rail or marine diesel that is not ULSD has a sulphur content of less then 500ppm or 0.05%

Dirty Oil,
I suppose the Canadian oil sands production is still stagnant?

Hiya Fish!


Fort McMurray STRONG! We are still producing (where I work currently) approx 690,000 bbl/day. Some smaller projects are on hold until we get that pipeline twined to Tide Water. There are many other producers still producing and expanding in the area.

[Grit_dog]

^ More fake news. Unless You mean LSD, not ULSD. ULSD was not even produced in the 90s.

[TugCE]

ALL Ships have to switch to ULSD when they cross an imaginary line at sea before entering a Port. This the reason that Tote and Crowley Maritime have just built tow ships that burn LNG. These ships run between ports on the US East Coast and Puerto Rico.

It is correct that ships can install a scrubber system (think huge DPF) but it is very expensive to install and also to maintain.

ALL, inland and Coastal Tug and Barges have been burning ULSD for many years, IIRC, we did the switch back in the early 90's.

[Grit_dog]

Lotsa wrong info in this thread. Most of the worlds transoceanic diesels still run off bunker fuel which actually is .5% sulfur/5000ppm. Only around the US is it limited to 1000ppm.
And bunker fuel is still like $1 a gallon but prices are rising with oil prices. It sure ain't sweet crude though.

[FishOnOne]

DirtyOil wrote:

ShinerBock wrote:
For those that do not know, a few years ago the International Maritime Organization made a significant regulation that will have a big impact on everyone's wallet, especially diesel vehicles owners. They set a new standard for sulfur content in ship diesel fuel that they allow at their ports to .5%S by January 1, 2020.They set a new standard for sulfur content in ship diesel fuel that they allow at their ports to .5%S by January 1, 2020. That is a significant drop from the current limit. While this will have an impact on everyone's wallet because this new fuel will be more costlier than current fuel used(which will increase prices on everyday goods), it may end up hurting or helping diesel owners according to some analyst.

Many here may remember when the EPA set the ULSD standard and how it effected diesel prices due to the extra refining and purification needed, and causing "sweet" crude prices to increase even more. For years, on land diesel owners alone had to pay the added cost for all of the added refining equipment and processes since the low sulfur fuel was only for them. Diesel fuel refiners also switched to using more "sweet" crude (that was only previously used to make gasoline) due to its lower sulfur content versus less expensive "sour" crude it used before causing the demand(and price) for "sweet" crude to increase.

There are people on both sides of this argument. Some are saying it will cause both diesel and gas prices to skyrocket because it would cause the demand for "sweet" crude to increase even higher. Others are saying that it will cause on road diesel prices to go down because now shipping will also be paying for the added refining processes spreading out the cost for the added piping and other equipment needing to purify "sour" crude.

What is your take on it?

You know 0.5% is 5000ppm.... that's a lot of sulphur!! In Canada we have been producing and selling ULSD since 2010 which has a sulphur content of equal or less then 15ppm or 0.0015% except for rail and marine. But since most of our refineries are producing ULSD even the rail and marine fuels are already ULSD. Any rail or marine diesel that is not ULSD has a sulphur content of less then 500ppm or 0.05%

Dirty Oil,
I suppose the Canadian oil sands production is still stagnant?

[thomasmnile]

Just me, but ever since Last Vegas (tongue in cheek) took over the oil futures market in the 70's, the 'house' always wins, consumers not so much. Local gas prices jumped several cents in this area because of the old 'tropical system in the Gulf' ploy. No control over what happens, I grin and bear it.

[Lessmore]

Interesting article regarding this topic. Don't know if it has been previously posted.

Future diesel prices

[DirtyOil]

ShinerBock wrote:
For those that do not know, a few years ago the International Maritime Organization made a significant regulation that will have a big impact on everyone's wallet, especially diesel vehicles owners. They set a new standard for sulfur content in ship diesel fuel that they allow at their ports to .5%S by January 1, 2020.They set a new standard for sulfur content in ship diesel fuel that they allow at their ports to .5%S by January 1, 2020. That is a significant drop from the current limit. While this will have an impact on everyone's wallet because this new fuel will be more costlier than current fuel used(which will increase prices on everyday goods), it may end up hurting or helping diesel owners according to some analyst.

Many here may remember when the EPA set the ULSD standard and how it effected diesel prices due to the extra refining and purification needed, and causing "sweet" crude prices to increase even more. For years, on land diesel owners alone had to pay the added cost for all of the added refining equipment and processes since the low sulfur fuel was only for them. Diesel fuel refiners also switched to using more "sweet" crude (that was only previously used to make gasoline) due to its lower sulfur content versus less expensive "sour" crude it used before causing the demand(and price) for "sweet" crude to increase.

There are people on both sides of this argument. Some are saying it will cause both diesel and gas prices to skyrocket because it would cause the demand for "sweet" crude to increase even higher. Others are saying that it will cause on road diesel prices to go down because now shipping will also be paying for the added refining processes spreading out the cost for the added piping and other equipment needing to purify "sour" crude.

What is your take on it?

You know 0.5% is 5000ppm.... that's a lot of sulphur!! In Canada we have been producing and selling ULSD since 2010 which has a sulphur content of equal or less then 15ppm or 0.0015% except for rail and marine. But since most of our refineries are producing ULSD even the rail and marine fuels are already ULSD. Any rail or marine diesel that is not ULSD has a sulphur content of less then 500ppm or 0.05%

[FishOnOne]

ShinerBock wrote:

FishOnOne wrote:

With the oil production output in West Texas projected to hit pipeline capacity, and some other very large recently discovered oil fields that will be coming on line, "sweet crude" supply will not be the issue.

In the oil/gas industry (which I'm very involved in) speculators (like your article) always drive prices up for the most part until the facts usually prove them wrong and prices settle.

I work very closely with the oil and gas industry was well, and I don't think west Texas can pump enough sweet crude for the added 3 million barrels per day that these ships use. I guess I will just have to link this thread into my Outlook to remind me to bring this thread back to life on 1/1/20 to see where the prices are at.

I didn't say West Texas will provide all the additional oil, but there are several large fields already identified that have the potential to produce way more than West Texas could ever produce. For now West Texas production output will soon be limited by pipeline capacity.

I'm very involved with the oil/gas industry. I design and manufacture both Hydrophones and Geophones and work extensively with the geophysicist of Exxon Mobil, Shell, Chevron and BP when it comes to seismic sensors so I have a good pulse on what's coming down the pipe... literally. These hydrophones are used in streamers that's used for offshore exploration that have been key to locating ~90% of the offshore gas and oil around the world for the last 14 years.

[ShinerBock]

FishOnOne wrote:

With the oil production output in West Texas projected to hit pipeline capacity, and some other very large recently discovered oil fields that will be coming on line, "sweet crude" supply will not be the issue.

In the oil/gas industry (which I'm very involved in) speculators (like your article) always drive prices up for the most part until the facts usually prove them wrong and prices settle.

I work very closely with the oil and gas industry was well, and I don't think west Texas can pump enough sweet crude for the added 3 million barrels per day that these ships use. I guess I will just have to link this thread into my Outlook to remind me to bring this thread back to life on 1/1/20 to see where the prices are at.

[fj12ryder]

drsteve wrote:

fj12ryder wrote:
I figure they'll either go up, or go down, or stay the same.

Bold prediction. Are you sure you want to go out on that limb?

Go big, or go home. 🙂 No equivocation...maybe.

[noteven]

I heard western Canada has oil and refined products available. Half our country prefers to use crude oil imported by sea from countries that mostly don't like us.

A Portuguese flagged tanker unloaded Russian crude in Anacortes, WA a week or two ago.

[FishOnOne]

ShinerBock wrote:

FishOnOne wrote:


Not knowing what the PPM levels will be, I suspect the marine diesel regulation will not have an impact with "on the road diesel" prices.

I would have to disagree. As the article a later posted after my original past. It will more than likely increase demand and price for "sweet" crude for a period of time and then settle back down. This will also increase gas prices since gas is made from "sweet" crude as well.

Why Diesel Prices Are Set To Soar

With the oil production output in West Texas projected to hit pipeline capacity, and some other very large recently discovered oil fields that will be coming on line, "sweet crude" supply will not be the issue.

In the oil/gas industry (which I'm very involved in) speculators (like your article) always drive prices up for the most part until the facts usually prove them wrong and prices settle.