Evgenia Vanadzina Gasum

Evgenia Vanadzina

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

29.04.2020  

Maritime market update: The world’s attention turns to the rising global oil inventories

Risavika LNG index was down 7 % week on week following European hub prices. Warmer weather forecast and covid-19 have a strong downside effect on gas demand, while supply remains stable.

The oil market has experienced an unprecedented volatility last week, resulting in WTI on Nymex going to the negative territory. The front month Brent has dropped to historically low levels just above 20 USD/BBL, although, remaining rather resilient for now as it is a global benchmark. As a result, fuel oil prices (FO 3.5) front month closed at 93.88 USD/t last Friday, 33 % lower than previous week. While Low Sulphur products lost 34-37 % compared to previous week.

The world’s attention turned to the rising global oil inventories. Traders are struggling to find enough ships, railcars, caverns and pipelines to store fuel as more conventional storage facilities are filling up amid abundant supply and low demand due to the covid-19. Dozens of oil tanker vessels have been booked in recent days to store at least 30 million BBL of jet fuel, gasoline and diesel at sea, acting as floating storage. This adds to about 130 million BBL of crude already in floating storage. Meanwhile, European refining and storage hubs still have space to fill, but most of them reportedly were already booked. Diesel and gasoil inventories in the Amsterdam-Rotterdam-Antwerp (ARA) trading hub rose 8.5% on the week to a seven-week high of 2.123 million mt as of 22nd of April, according to S&P Global Platts.

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

15.77

6.73

11.26

13.48

14.65

EUR/MWh

267.15

93.88

164.03

196.33

204.33

USD/t

 Price index 27.4.2020.png

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

*An estimate for LNG FOB Risavika