Valero Set To Profit If IMO 2020 Causes Distillate Or Gas Prices To Spike - Valero Energy Corporatio
The International Maritime Organization (IMO) regulates many activities associated with global shipping, including marine fuel quality. Effective Jan. 1, 2020, the sulfur specification of bunker fuels in non-emission control areas (ECAs) will be reduced from 3.5% to 0.5%. The regulation is referred to as IMO 2020.
With just about fifty days remaining prior to January 1st, dire predictions of the effects of IMO 2020 appear unfounded. Philip K. Verleger, well-known consultant to the oil industry, foretold in a paper, $200 Crude, the Economic Crisis of 2020, and Policies to Prevent Catastrophe, dated July 2018:
The global economy likely faces an economic crash of horrible proportions in 2020, not for want of a nail but want of low-sulfur diesel fuel. The lack of adequate supplies promises to send the price of this fuel which is critical to the worlds agricultural, trucking, railroad, and shipping industriesto astoundingly high levels. Economic activity will slow and, in some places, grind to a halt. Food costs will climb as farmers, unable to pay for fuel, reduce plantings. Deliveries of goods and materials to factories and stores will slow or stop. Vehicle sales will plummet, especially those of gas-guzzling sport utility vehicles (SUVs). One or more major US automakers will face bankruptcy, even closure. Housing foreclosures will surge in the United States, Europe, and other parts of the world. Millions will join the ranks of the unemployed as they....