Evgenia Vanadzina Gasum

Evgenia Vanadzina

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

21.07.2020  

Maritime market update: well supplied oil and gas markets are keeping prices in check

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Risavika LNG index has further dropped by 2.6 % week on week to 15.12 EUR/MWh. The gas market remained well supplied despite the maintenance at one of major gas import pipelines, Nord Stream. Higher LNG sendouts from the terminals and storage withdrawals substituted the Russian pipeline flow, keeping the prices low.

OPEC+ meeting last week has resulted in an agreement to ease oil production cuts, thus, the production cuts would be 7.7 million barrel per day (bpd) from August to December, instead of the record high 9.7 million bpd. This news was followed by news on new covid-19 cases around the world, which raised uncertainty around demand recovery. Oil prices were slightly down last Friday and closed at 43.14 USD/BBL.  Accordingly, fuel oil front prices (FO 3.5) closed at 237.01 USD/t last week, dropping by 1.3 % week on week. Similarly, Low Sulphur (MFO 0.5) front month closed at 299.96 USD/t, losing 1.4 % from the previous week.

Fuel oil stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub dropped by 12% as of 16th of July, reaching 1.3 million tons. This drop was due to no imports during the week, while export was picking up in the Mediterranean region. At the same time, gasoil stocks have increased slightly by 1.5 % to 2.719 million tons.

 

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

15.12

18.12

16.99

20.59

24.44

26.32

EUR/MWh

256.06

306.88

237.01

299.96

356.02

367.08

USD/t

 Price index 20.7.2020.png

Source: CME Group, Gasum, Reuters

*An estimate for LNG FOB Risavika 

** An estimate for 10 % LBG blend FOB Risavika