Maritime market update: summer prices outlook

Risavika LNG gained 1.1 % week on week and was at 35.20 EUR/MWh for June contracts. European gas prices were bullish last week on tight supply despite the warmer weather forecast in North-west Europe (NWE) and closed for June contracts on highest levels since 2013. The pace of gas storage injections has been increasing in the second half of the month, however, the room for injections remains high, while supply is slowing down for coming months due to maintenances and lower number of LNG cargoes arrivals to NWE. Nord Stream 2, which can supply additional volumes to Europe, is not likely to be completed during summer to ease supply tightness. Therefore, the outlook on European gas prices for this summer is still bullish.

Oil products prices have been volatile last week, resulting on an increase at the end of week. Supported by promising oil demand outlook, refineries increased their throughput, which resulted in a build in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub. However, it had no impact on price so far. Fuel oil 3.5 (FO 3.5) gained 4.3 % week on week to 364.21 USD/t, low sulphur oil (MFO 0.5) increased by 3.8 % to 474.03 USD/t, and marine gasoil (MGO 0.1) gained 3.7 % to 557.94 USD/t. Looking ahead, the summer months prices are supported by positive demand outlook on easing movement and travel restrictions in Europe as vaccination rates increase. However, the demand recovery is likely to be limited and still below 2019 levels during the summer.

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
35.20	38.20	26.11	32.55	38.31	40.53	EUR/MWh
596.29	647.11	364.21	474.03	557.94	565.32	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, Argus Media, Reuters

*An estimate for LNG FOB Risavika

** An estimate for 10 % LBG blend FOB Risavika