The exercise intensity that produces the maximum fat oxidation rate (known as FATmax) varies widely, but primarily correlates with aerobic capacity. Fitter individuals are able to oxidize fat at higher rates across all intensities, but their maximum fat oxidation rate is at a much higher intensity than unfit individuals.
Obese individuals have a decreased capacity to access fat during moderate exercise. Lower intensity exercise is recommended to begin with. As conditioning improves, exercise intensity should be increased to take advantage of increasing FATmax.
A recent study found that steady state exercise training at FATmax intensity increase insulin sensitivity more than an interval training protocol at 20% higher intensity. But FATmax cannot be calculated outside of a lab, so we have to estimate it. In very fit individuals, FATmax is somewhere near lactate threshold intensity….which is below anaerobic capacity. This intensity feels like work, but can be continued for about 20 minutes.