Maritime market update: more gas supplies expected from Russia?

European gas markets continued a bullish trend, Risavika LNG gained further 5.4 % week on week and was at 37.85 EUR/MWh for July contracts. With uncommitted LNG cargoes mostly sailing towards Asia and lower pipeline gas supplies during summer, European gas market is most likely to remain tightened. The operator of the Nord Stream 2 (NS2) pipeline said pre-commissioning work started on the first line of the system last week, and the second line to be completed by the end of August. Russian officials said earlier this year that the pipeline could begin shipping gas by the end of this summer. NS2 would provide additional European imports at a time when storage inventories remain low after a cold spring, however, when exactly service will start and the impact it might have on European energy markets remains unclear.

Oil product prices were supported by inventory draws and rally of benchmark crude, however the impact on prices was minor as demand recovery seems to have a slow pace with IEA projecting oil demand reaching 2019 levels only in 2022. Benchmark crude prices have been rallying on the back of higher demand for gasoline and high compliance from OPEC+ on their current production cuts. Therefore, we could see further increase in oil product prices during the summer. Fuel oil 3.5 (FO 3.5) dropped 0.8 % week on week to 387.25 USD/t, low sulphur oil (MFO 0.5) decreased by 0.3 % to 498.85 USD/t, while marine gasoil (MGO 0.1) gained 1.1 % to 580.15 USD/t.

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
37.85	40.85	27.76	34.25	39.83	42.23	EUR/MWh
641.12	691.94	387.25	498.85	580.15	589.06	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, NGI, Argus Media

*An estimate for LNG FOB Risavika

** An estimate for 10 % LBG blend FOB Risavika