Top Analyst Quits Bank for Riches of Obscure Fuel Rule
Top Norway Oil Analyst Quitting DNB for Riches of 2020 Fuel Rule
(Bloomberg) -- Oil analyst Torbjorn Kjus said he’s quitting Norway’s biggest bank to pursue opportunities that will arise thanks to an obscure but far-reaching change to fuel rules for the shipping industry.
Kjus, who has followed the market for almost two decades, will join Vistin Trading AS as a fund manager next week after leaving DNB ASA. The thematic fund, which will trade primarily off the International Maritime Organization’s plans to curb ship-fuel sulfur emissions worldwide from 2020, already recruited Kenneth Tveter from DNB in a similar role.
“It’s the perfect time to start,” Kjus, 48, said by phone from Oslo on Monday. “Because this topic is so extremely interesting and has so many effects, most of them have not been priced in.”
Kjus -- who was recently ranked as Norway’s number one analyst in the magazine Kapital -- said the business is now taking positions in the market. The venture was set up by Oslo-based drug maker Vistin Pharma ASA as it seeks to expand into energy trading.
The new company has raised $40 million in capital for initial trading and will take positions largely a year or two down the futures curve, said Kjus, who spent 11 years at DNB and six years prior to that at BP Plc and Norsk Hydro ASA.
The IMO’s rule change, which would cut sulfur content in ship fuel to 0.5 percent from 3.5 percent in most cases, is reverberating across the global oil market. It’s anticipated that demand for lower sulfur fuel from ships will boost consumption of diesel-like products, such as gasoil. ICE gasoil futures for January 2020, for example, have risen 18 percent so far this year to $653.25 a ton.
And the impact of the changes could be felt in many industries. Morgan Stanley has said the new regulations may propel crude prices to $90 a barrel, while other analyst have highlighted the impact on sectors including aviation, refining and wider global trade as well as shipping.
Kjus said the IMO rule change will be the venture’s first major theme, and that once it has run its course the business would seek new trading opportunities.
To contact the reporter on this story: Alex Longley in London at alongley@bloomberg.net
To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net, John Deane, Brian Wingfield
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