US Gulf

There’s good reason to be bullish about a skyrocketing trajectory for US methanol production. Natural gas prices are relatively low and likely to stay so; domestic demand for methanol continues to increase; and overseas demand—especially in China—is rising even faster. More than a dozen methanol mega-projects are in various stages of planning, design and construction, most of them along the Gulf Coast. If they were all built (they probably won’t be), US methanol production capacity would increase more than 10-fold to nearly 30 million metric tons per year, and turn the US from a methanol importer to an exporter within two or three years. Today, we look into why methanol demand is rising, what new capacity is under development in the US, and what it all means for natural gas producers.

Forty percent of the world’s fuel oil - the residual oil left over after extracting lighter products from crude oil - is used as bunker oil to power Ocean going vessels. Much of that fuel has relatively high sulfur content. Given that refineries sell fuel oil for less than the cost of crude – the bunkers market has traditionally been a convenient dumping ground for unwanted high sulfur residual fuel oil. New international regulations that came into force in 2012 drastically reduce the permitted sulfur content in bunkers after 2015 in the world’s populated coastal regions. Today we describe the impact the new rules could have on refiners.