'But no one can guarantee that the current correlations, to the extent they exist, between these products and LSFO will exist beyond 2020, because the supply and demand of these products will be completely different then,' he explained. 'That something else could be Brent or WTI. 'We've looked at this many times and we've tried to find the right correlation between LSFO and something else,' he continued. I believe the market for LSFO is going to develop sooner than people expect, because people are starting to buy LSFO. But I don't think we need to be impatient. 'We have been asking ourselves this question for at least the last three months and we haven't come up with a perfect solution, because a perfect solution does not exist. We have not reached the point where we believe we can rely on that paper, but we do believe that once the LSFO is being used, which will happen ahead of January 2020, there will be a possibility to take a hedge. The core problem, they said, is that the paper market for LSFO is thin and not yet developed enough, and there is not enough confidence in correlations between LSFO and other products that do have more evolved derivatives markets.ДЄccording to Euronav CEO Hugo De Stoop, 'We strongly believe that there will be a dynamic derivatives market in LSFO, which does not exist today. 5 held by executives of Euronav (NYSE: EURN), one of the largest tanker owners in the world. The hurdles faced by ocean shipping participants seeking to hedge IMO 2020 risks were highlighted during a conference call on Sept. The highest-profile hedging proponent is London-based Enerjen Capital, which is advising clients and offering its own solution, the Enerjen Capital IMO 2020 Note, a curated hedge basket with upside leverage.Д«ut there are significant challenges to maritime hedging. In the maritime sector, however, it's more difficult.

The good news for land and air transport is that there are well-developed futures markets that allow for hedging of diesel and jet fuel. With increased competition to procure mid-distillates, IMO 2020 is expected to be inflationary for diesel and jet fuel, which would have implications from the broader transportation landscape.' According to Deutsche Bank transportation analyst Amit Mehrotra, 'We forecast the IMO regulation will push about 2 million barrels per day of global oil demand into the mid-distillate bucket (+5%) at the expense of residual fuel demand (-25%).

Jet fuel fallout 4