Thread by @cbjom

1/Here is why you [the market] and the @IEA have got it wrong on #IMO2020.
This is what a 'little disruption' may entail....
#OOTT

https://twitter.com/cbjom/status/1172077570629799936

@IEA 2/ #IMO2020 crunch time for #oil product balances coming in Dec/Jan not Apr20 (as per IEA). No @IMOHQ derogations/no delays. Market is telling us so as prompt HSFO cracks collapse.
#OOTT

@IEA @IMOHQ 3/ #IMO2020 compliance is being way underestimated by @IEA. Not worth the risk for shippers. Problem with the 0.5% VLSFO alternative is that it will be available, but not compatible. Not worth the risk. Shippers will go for Marine Gasoil (MGO) in size until comfortable.
#OOTT

@IEA @IMOHQ 4/ Huge pull on gasoil/diesel coming to a port near you. MGO demand will surge >1.5mmbd yoy over 1H20. But so will demand for disty blends in the 0.5% VLFO (often overlooked). Add some ~300kbd (onshore) demand and we have the makings of a disty supply squeeze in 1H20.
#OOTT

@IEA @IMOHQ 5/ The #oil market is not ready #IMO2020. #Distillate days' forward cover is way too low in all major consuming hubs. We should be building buffer stocks. Instead, distillate structure has gone backwardated everywhere. Market is signalling stock draws...that's ominous.
#OOTT

@IEA @IMOHQ 6/ The solver is more distillate supply. Distillate cracks must fly. Refiners need the incentive to run. Collapsing HSFO cracks ain't going to do it as this just switches off the marginal/simple #oil refining kit the world needs to meet this demand.
#OOTT

@IEA @IMOHQ 7/ The disruption to refining #oil margins/seasonal stocks draws/ yield switches/product flows/#crude relative values and, lastly, oil balances will certainly be disruptive. But it will not be 'little'.
#OOTT