A strengthening global economy this year is seen feeding through to Asian trade and will drive growth in marine or bunker fuel consumption, three oil and gas research firms forecast.
Asian demand for marine fuel is expected to grow up to two per cent in 2014 after stagnating for five years, as more goods and raw materials are shipped in the region, though returns on the most common ship fuel are unlikely to improve due to ample supplies.
A strengthening global economy this year is seen feeding through to Asian trade and will drive growth in marine or bunker fuel consumption, three oil and gas research firms forecast.
The need for more fuel oil-the most common bunker product-comes as refiners in the region cut back on output of the residual end of the barrel, though this is likely to be balanced by lower demand from the power sector in Japan and North Asia.
Plentiful fuel oil supplies from the Middle East and Europe also mean the market should remain well supplied.
Consultancy Wood Mackenzie expects bunker fuel demand in Asia to be about 1.42 million barrels per day, or bpd, this year and 1.45 million bpd the next, up from 1.39 million bpd in 2013.
That's equivalent to an annual growth of about two per cent.
"We are seeing a steady growth in bunker fuel demand in line with Asia's increasing trade with other regions," said Suresh Sivanandam of Woodmac.
IHS Energy and Energy Security Analysis have also projected a stronger bunker market in Asia, pegging demand in 2014-15 at between 1.34 million and 1.35 million bpd.
IHS said that was up about one per cent from 2012-13.
The world economy is expected to grow 3.4 per cent this year versus 2.9 per cent last year, as more vigorous expansion in the United States and some of Europe's biggest economies make up for slowing growth in China.
The growth in bunker fuel use is not expected to lift fuel oil cracks, a measure of the return on processing crude into heavy residue fuel oils such as 380-centistoke.
Fuel oil accounts for nearly all bunker requirements in Asia, with 380-cst making up about 75 per cent of total marine sales in Singapore, the world's No. 1 bunkering hub.
Refineries break down fuel oil into higher-value products like gasoline, diesel and jet fuel using secondary units, and Asian refiners have been adding more of these units.
That has cut into regional supplies of fuel oil, and in 2014-15, the Asia-Pacific's output of the product is projected to be around 2.03 million barrels per day, down 4.25 per cent from 2013 and 15 per cent from 2010, according to figures from IHS Energy.
