Evgenia Vanadzina Gasum

Evgenia Vanadzina

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

09.02.2021  

Maritime market update: oil products prices rise making LNG a fuel of choice for shipping

Risavika LNG front month has dropped further for front month contracts, it was at 28.38 EUR/MWh for March and 5.1 % higher week-on-week. However, European hub prices are currently quite bullish on colder weather outlook by the end of February, which can give support to front month prices this week.

Oil products had a considerable upside last week on the back of oil prices rally. Markets are quite optimistic on demand recovery due to recent drop in US inventory, rollout of vaccine globally oil production cuts. Fuel oil 3.5 has increased 7.4 % and closed at 334 USD/t for front month contracts. Low sulfur oil (MFO 0.5) has gained 8.4 % and closed at 437.28 USD/t, and marine gasoil (MGO 0.1) has increased 7.7 % week on week and closed at 480.66 USD/t.

The total amount of oil products held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) trading hub fell over the last week of January, according to consultancy Insights Global. Stocks of all surveyed products fell, with the exception of fuel oil. Fuel oil stocks rose to reach their highest since late November. The increase in available supply is weighing heavily on marine fuel prices in the ARA area and creating export opportunities. However, increase in benchmark oil prices supported oil products future prices, while LNG prices are decreasing amid seasonal change.

 

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

28.38

31.38

23.95

30.02

33.00

35.06

EUR/MWh

480.77

531.60

334.00

437.28

480.66

488.99

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, Global Insights

*An estimate for LNG FOB Risavika 

** An estimate for 10 % LBG blend FOB Risavika