Evgenia Vanadzina Gasum

Evgenia Vanadzina

Portfolio Manager
evgenia.vanadzina@gasum.com
tel. +358401801066

06.10.2021  

Maritime market update: gas market prices are at a record high

Risavika LNG index was up 22 %, reaching 103.63 EUR/MWh for November contracts. European gas market prices continue to be at the record highs and sentiment remains bullish as supply is limited. Asian spot LNG prices are poised to surpass the all-time high recorded early this year and remained a premium market for LNG, leading to more cargoes being delivered to Asian buyers. The latest rally in spot LNG prices has pushed several Asian buyers to turn to cheaper alternative fuels to meet their power requirements. The weather will determine the extend of gas rally, a colder than expected winter means several Asian buyers will have to secure additional supplies to meet extra heating requirements, increasing the competition for a limited pool of supplies.

Oil product prices have increased too, however, slightly. Fuel oil 3.5 (FO 3.5) price has gained 2.9% to 438.18 USD/t, low sulphur oil (MFO 0.5) and marine gasoil (MGO 0.1) gained 0.7% and 2.6 % to 534.55 USD/t and 657.86 USD/t respectively week on week. Oil supply to the market is tight. The Opec+ alliance has agreed to stick to its plan to increase its collective crude production quota by 400,000 b/d next month, despite growing signs that the market may need a larger hike. The Brent benchmark prices are above 80 USD/BBL, at highest since 2018. Gas prices rally also added bullish sentiment to the oil market as many gas consumer are incentivized to switch to oil products for this winter season.

 

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

103.63

106.63

31.42

36.70

45.17

48.13

EUR/MWh

1755.47

1806.29

438.18

534.55

657.86

671.32

USD/t

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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