Singapore braced for looming fuel oil deadline

Market backwardation and IMO 2020 adjustments balance storage trends

The Asia-Pacific oil storage sector is facing two countervailing trends in rough balance as it moves into late 2019. Backwardated markets—when spot prices exceed forward contract prices—are discouraging inventory builds, while January 2020's switch to new International Maritime Organization (IMO) fuel oil sulphur content rules is encouraging increased fuel oil and components storage. Looking to a more distant horizon, leading independent oil storage companies highlight a growth in gas and chemicals storage over oil products tankage. Industry officials have broadly focussed on fuel oil storage trends. "The reality is that this industry is in transition. For a period, you may not get double st