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Rated De
As shale became the play, many of the refineries during their maintenance cycles altered the refining towards producing shale oil. Shale is lighter (in comparison to WTI for example) with the result being less middle distillates being manufactured.
Middle distillates include things like LPG, diesel and heating oil. Jet fuel is also a middle distillate.
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Demand for middle distillates will get even tighter when the new Maritime emission standards come into play with the abolition of heavy bunker fuel in 2020.
LONDON (Reuters) - New rules coming into force from 2020 to curb pollution produced by the world’s ships are worrying everyone from OPEC oil producers to bunker fuel sellers and shipping companies. The regulations will slash emissions of sulfur, which is blamed for causing respiratory diseases and is a component of acid rain that damages vegetation and wildlife.
But the energy and shipping industries are ill-prepared, say analysts, with refiners likely to struggle to meet higher demand for cleaner fuel and few ships fitted with equipment to reduce sulfur emissions.
This raises the risk of a chaotic shift when the new rules are implemented, alongside more volatility in the oil market.
“The reality is that the industry has already passed the date beyond the smooth transition,” Neil Atkinson, head of the oil industry and market division at the International Energy Agency (IEA), said in April.
Sounds like Qantas need a new fleet , sooner rather than later.