It’s a new year and a new decade, time to establish your fuel budget for the new year! Is your business the type that relies on a set budget for distillates or gasoline? Do you look to protect your costs in a volatile market? Around this time last year, we experienced a significant drop followed by a quick recovery on distillate prices. What will happen in 2020?
There are three headlines that we should keep on the radar for looming questions and/or potential buying opportunities.
- The International Maritime Organization (IMO) has a new regulation that took effect January 1st requiring all international vessels to consume diesel fuel with 0.5% sulfur content, down from 3.5%. This has caused diesel inventories in the New York Harbor market to drop below its 5-year historical range. How much of an impact will this continue to have?
- The OPEC meeting that took place in Vienna, Austria early December which resulted in the approval of production cuts for the first quarter of 2020. Could the cuts be extended further?
- Trade deal negotiations between the U.S. and China. In later December after agreeing to phase one of a new deal, China announced a one-year tariff exemption on six chemical and oil derivatives, a positive sign that tensions are easing, and progress is being made. What’s in store for the remaining stages of the deal?
Today marks only the 2nd day of the new year, but as mentioned above there is plenty to think about already. For more details and information please contact your Guttman fuel representative. Our Bulk Fuels team will be happy to provide more data as we look to help those searching for the right time to set a budget for 2020. Happy New year!