Evgenia Vanadzina Gasum

Evgenia Vanadzina

Portfolio Manager
evgenia.vanadzina@gasum.com
tel. +358401801066

25.08.2020  

Maritime market update: a record low Hi-5 spread in ARA

Risavika LNG index for September was up 0.6 % week on week to 18.13 EUR/MWh. Maintenances in Norway, continuing until almost mid-September, tightened the pipeline gas supply, while there are not yet signs of increase in LNG arrivals to Europe.

Oil prices last week has lost 1 % on demand concerns due to the second wave of covid-19. However, the impact on maritime fuel prices has been negligible as fuel oil front prices (FO 3.5) closed at 245.75 USD/t last week, 1.8 % higher week on week, while low sulphur oil products has lost  3-4 % from previous week (MFO 0.5, MGO and ULSD), further lowering the spread between low sulphur bunker fuel and 3.5 %

S&P Global Platts reported that, in Rotterdam, the premium of 0.5% sulfur bunker fuel over 3.5% fuel oil, also known as the Hi-5 bunker spread, was assessed at $27/mt on Aug. 21. The premium has descended to less than a tenth of the highs seen in January, reaching its lowest levels since Platts began assessing it in July 2019. There was ample supply of product, as stocks for all fuel oil products in the Amsterdam-Rotterdam-Antwerp (ARA) region jumped 10% on the week to Aug. 19. However, high sulfur fuel oil has been contending with limited supply, yet strong demand from the US and West Africa, in addition to support from a local demand.

 

LNG Risavika - LNG FOB Risavika 

LBG Risavika 10 % - 10 % blend of Liquified Biogas

FO 3.5 FOB Rdam – European 3.5% Fuel Oil Barges FOB Rdam (Platts) Futures Quotes

MFO 0.5 FOB Rdam - European FOB Rdam Marine Fuel 0.5% Barges (Platts) Futures Quotes

MGO 0.1 FOB ARA - Gasoil 0.1% Barges FOB ARA (Platts) Futures Quotes

ULSD FOB ARA - European Diesel 10 ppm Barges FOB ARA (Platts) Futures Quotes

 

Front Month Price index

LNG Risavika*

LBG blend

Risavika**

FO 3.5 FOB Rdam

MFO 0.5 FOB Rdam

MGO 0.1 FOB ARA

ULSD FOB ARA

Unit

18.13

21.13

17.94

20.69

24.02

25.81

EUR/MWh

307.05

357.87

250.21

301.34

349.85

359.93

USD/t

 Price index 24.8.2020.png

Source: CME Group, Gasum, S&P Global Platts

*An estimate for LNG FOB Risavika 

** An estimate for 10 % LBG blend FOB Risavika