Evgenia Vanadzina Gasum

Evgenia Vanadzina

Analyst
evgenia.vanadzina@gasum.com
p. +358401801066

14.07.2020  

Maritime market update: mixed signals on recovery

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Risavika LNG index has dropped by 2.8 % week on week on rising LNG sendouts last week as number of LNG cargo arrivals slightly increases. European gas markets were supported by slightly colder for the season temperatures. However, the supply side was healthy and strong, which did not allow the prices increase.

Last week was volatile for benchmark crude prices due to new covid-19 cases and new restrictions related to it. However, Brent closed at 43.24 USD/BBL last Friday supported by IEA oil demand forecast increase. Accordingly, fuel oil front prices (FO 3.5) closed at 240.03  USD/t last week, gaining 3.3 % week on week. However, Low Sulphur (MFO 0.5) front month prices remained almost unchanged closed at 304.3 USD/t.

Fuel oil stocks held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell slightly by 3 % to 1.485 million tons as of 9th of July. There is some demand in the Middle East, but bunkering demand from the shipping industry continues to be weak according to Reuters. On the other hand, gasoil stocks rose by 2.5 % due to low inland demand, the tanks at the river Rhine were still full. Inventory data sends mixed signals on the demand recovery, indicating that it is happening but it will likely take some time.

 

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

15.51

18.51

17.21

20.89

24.71

26.45

EUR/MWh

262.75

313.57

240.03

304.30

359.92

368.98

USD/t

Price index 13.7.2020.png

 

Source: CME Group, Gasum, Reuters

*An estimate for LNG FOB Risavika 

** An estimate for 10 % LBG blend FOB Risavika