02.11.2021

Maritime market update: the end of a bull run for gas?

A considerable drop for Risavika LNG index, it was down 30.4 % week on week and at 75.65 EUR/MWh for December contract as the trading month changed. The gas prices in Europe retreat from all times highs amid a prospect of higher LNG supplies and potential higher supplies from Russia following the Putin’s statement last week. Gas prices have lowered for the whole curve in 2022 and there is further downside potential when Nord Stream 2 starts its operation. However, the market is likely to stay volatile in medium term and the demand will be largely driven by the weather and renewables output.

Oil product prices experienced a volatile week, the inventories were also showing a mixed picture, but the underlying fundamentals remain the same and tight supply situation to continue. Fuel oil 3.5 (FO 3.5) price was down 3.6 % to 442.46 USD/t, low sulphur oil (MFO 0.5) and marine gasoil (MGO 0.1) dropped 2.8 % and 3.9 % to 570.31 USD/t and 697.11 USD/t respectively week on week. OPEC+ is under diplomatic pressure to increase their oil production and ease the pressure on prices, however, the organization and allies are likely to stick to their production plan and no surprises are expected during OPEC+ meeting this week.

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