Evgenia Vanadzina Gasum

Evgenia Vanadzina

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

05.05.2020  

Maritime market update: The Port of Rotterdam supports LNG and LBG

Risavika LNG index has increased 1 % week on week. However, all market fundamentals indicate that the gas market is oversupplied and will continue to be so during this week, pressuring prices down. There are some indications that gas demand from industry and businesses might start recovering in Europe as many countries are gradually easing coronavirus lockdowns, which should give some support to the LNG prices.

The oil price moved up

Last week has been another rather volatile week in the oil market. Oil prices has moved up last week as major oil producers started production cuts due to low price environment. In addition, OPEC+ oil production cuts have started from May. Consequently, fuel oil prices (FO 3.5) front month increased to 118.54 USD/t last Friday, 21 % higher than previous week. While Low Sulphur products gained 13-15 % compared to previous week. Stocks of fuel oil in the Amsterdam-Rotterdam-Antwerp (ARA) hub jumped 18 % to 1.604 million mt last Wednesday, according to data from Insights Global.

Cleaner marine fuels necessitate energy tax exemption

Meantime, while Europe is its course for a gradual recovery from the coronavirus, environmental topics are back on the agenda. The Port of Rotterdam Authority has recently announced its strong support for the European Commission’s Fuel EU Maritime initiative and encouraged the use of alternative fuels, partly through the Incentive Scheme Climate-Friendly Shipping. The authority emphasized that, in order to stimulate cleaner marine fuels and shore power, it is important that these fuels are exempted from energy tax, both at European and at national level. The Port of Rotterdam Authority is in favour of continuing to stimulate LNG as a transition path for the use of bio-LNG in the future.

LNG Risavika - LNG FOB Risavika 

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*

FO 3.5 FOB Rdam

MFO 0.5 FOB Rdam

MGO 0.1 FOB ARA

ULSD FOB ARA

Unit

15.85

8.50

12.92

15.82

17.09

EUR/MWh

268.42

118.54

188.23

230.41

238.41

USD/t

 

Price index 4.5.2020.png

Source: CME Group, Gasum, S&P Global Platts, Port of Rotterdam

*An estimate for LNG FOB Risavika