Maritime market update: back to demand recovery concerns

A considerable gain for Risavika LNG week on week, reaching 28.45 EUR/MWh for April index and a 7.3 % increase. The European prices for April have been rallying last week on colder weather forecast, resulting in higher demand for heating. The gas inventory levels and pipeline imports remain low, supporting the prices for the front month.

The benchmark oil prices have been supported by OPEC+ cuts continuation and rallied on Saudi facilities attack last week. However, as this sentiment was not lasting, impact on oil products prices remained sideways. Fuel oil 3.5 has decreased 1.1 % and closed at 381.87 USD/t for front month contracts, low sulfur oil (MFO 0.5) is sideways at 493.1 USD/t, and marine gasoil (MGO 0.1) has increased only by 0.9 % week on week and closed at 543.71 USD/t on the inventory draw data.

Demand recovery still weighs on the oil products prices with oil inventory data showing mixed picture in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) and crude oil prices falling this week after two weeks of rallying. Corona virus related fears simmered after reports emerged that several European countries are stopping the Oxford-AstraZeneca vaccine. The decision has added doubts over recovery from the pandemic, resulting in energy demand recovery uncertainty in the region. In addition, rising infection rates in Europe are causing more concerns while vaccine rollout was heavily criticized for being slow and inefficient.

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
28.45	31.45	27.38	33.86	37.33	39.63	EUR/MWh
481.96	532.78	381.87	493.10	543.71	552.69	USD/t

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

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

*An estimate for LNG FOB Risavika

** An estimate for 10 % LBG blend FOB Risavika