07NOV2019 - NEWS - 2020 Marine Gasoil Demand To Top Expectations

Anthony Gurnee, CEO of product-tanker owner Ardmore Shipping (NYSE: ASC), maintained during a conference call with analysts on Nov. 5 that the pendulum has just swung more toward MGO and away from VLSFO.

Unexpected Transition Timing

One factor that bodes well for MGO over VLSFO is that MGO is more available and well-known and VLSFO is an entirely new product.

Ship owners had previously thought VLSFO would have already been positioned at the world's refueling facilities by now. That hasn't happened. Instead, ship owners appear to be waiting until the last possible moment to make the switchover to compliant fuel, and bunker suppliers are not preemptively bringing in VLSFO before ship owners make that switch.