Oil to hit $0 in 2020 on diesel, jet fuel demand: Morgan Stanley

that will demand will grow by roughly another 1.5 million barrels a day due to tighter pollution rules inside the shipping industry, Morgan Stanley projects.

In 2020, the International Maritime Organization will enforce fresh emissions standards that will will require ships to either install equipment to scrub pollutants through engines or use cleaner-burning low-sulfur fuel. Morgan Stanley says most shippers will opt for the latter, effectively shifting demand through additional fuel types to distillates.

Meanwhile, most of the growth in global oil production can be coming through natural gas liquids in addition to condensates, a type of super light oil. that will’s a problem because neither of those liquids are used to make middle distillates, Morgan Stanley says.

According to the bank’s estimates, global crude oil output would likely need to grow by 5.7 million barrels a day by 2020 to meet growing distillate consumption. Morgan Stanley does not think that will’s possible.

“We see global crude production re-accelerating again, yet falling well short of This kind of level. Since 1984, crude oil production growth over a 3-year period has reached This kind of level only once,” Rats said.

On Wednesday, the International Energy Agency said This kind of expects oil through countries outside OPEC to grow by nearly 1.9 million barrels a day This kind of year.

The crude shortfall will help push gasoil prices to about $850 per ton, or 25 percent to 30 percent above today’s levels, Morgan Stanley projects. that will will consequently push Brent to $0 a barrel.

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