Tightening the requirements for sulfur content in marine fuel from 2020 will lead to serious changes in the market, warn the experts of the Analytical Center in the new energy bulletin. The authors admit the possibility of the emergence of product imbalances of supply and demand and price fluctuations.
According to the analysts, the restrictions on high-sulfur fuel oil in offshore bunkering create challenges for the Russian oil refining industry, but the work aimed at overcoming these challenges has been going on for a long time.
The analysis of the situation with different types of fuel in the bulletin shows that the prices in the world oil market continued their growth in February, returning to the level of November 2018, which was mainly caused by the reduction in oil production by OPEC countries. In January, oil production in Russia grew by 3.9% compared to January 2018, but average daily production fell by 0.7% against December 2018 as part of fulfilling the conditions of the OPEC+ transaction. Retail prices for gasoline and diesel fuel fell slightly in February.
In January, gas prices in world markets declined, especially in the US (-24.1% against December). In 2018, Russia increased pipeline gas exports by 3.6% compared to 2017, updating record values for the third year in a row.
In January, coal production in Russia grew by 3.9% compared to January 2018, while exports decreased by 0.5%. Coal prices worldwide have declined, especially for thermal coal in Europe and for premium grade sintering coal.
As for the electric power industry, the authors state the following: additional output (above the balance of the FAS of Russia) of Russian NPPs in 2018 exceeded 2.9 bln kWh.
Analysts note the growing interest of the state and Russian energy companies in digitalization. The main effects for the companies involve the reduction of costs and an increase in competitiveness, and the state seeks to stimulate digitalization by eliminating regulatory barriers.
The authors also write about updating the model of the electricity market in the EU.
For more details, see the bulletin "New Requirements for Marine Fuel."
For other bulletins on the energy issues, see Publications.