14.08.2021

Maritime market update: bullish gas market and bearish oil

Rally of European gas prices continued last week, Risavika LNG index reached 53.12 EUR/MWh for the front month, gaining 4.5 %. Price volatility last week was caused by accident at Gazprom’s Novy Urengoy plant, which resulted in low import flows through Mallnow and climb on storage withdrawals. The flows are still reduced at the beginning this week, impacting hub prices in Europe. The sentiment for the autumn gas market remains largely bullish on expectation of higher demand, especially if withdrawals continue, while gas supply is lower than last year.

A considerable drop for oil product prices due to inventory build for some products and crude prices slipping below $ 70/BBL. Fuel oil 3.5 (FO 3.5) price has decreased 6.7 % to 376.84 USD/t, low sulphur oil (MFO 0.5) and marine gasoil (MGO 0.1) were down by 5.7 and 5.6 % to 491.06 USD/t and 570.35 USD/t respectively week on week. The main market concern at the moment is potential oversupply with return of OPEC+ volumes, while the demand is fragile due to spread of covid variants. The OPEC+ group has already added 680 000 BBL/D to its crude output last month, boosted by higher quotas and the end of Saudi Arabia's extra cut. With covid-19 restriction reimposed in China, the upside in oil market is limited.

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, Argus Media

*An estimate for LNG FOB Risavika 

** An estimate for 10 % LBG blend FOB Risavika