Evgenia Vanadzina Gasum

Evgenia Vanadzina

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

25.05.2021  

Maritime market update: tight LNG supply and oil oversupply?

Risavika LNG dropped 5.8 % to 34.8 EUR/MWh week on week (w-o-w) after a month of rally. Weather forecast adjusting higher at the beginning of June provided a bearish sentiment to the market. However, the European gas markets remain bullish on lower supply due to maintenances in Norway and slow LNG arrivals, while demand for storage injections is at its highest for the summer. Biden administration waived sanctions on Nord Stream 2 last week, thus, the pipeline can potentially be built until the end of 2021 and start supplying natural gas to Germany this winter.

Oil products prices continued downward trend on weaker crude oil prices and lower demand despite the inventories draw. Fuel oil 3.5 (FO 3.5) was lower 4.8 % w-o-w to 238.37 USD/T, low sulphur oil (MFO 0.5) decreased by 4 % to 455.95 USD/t, and marine gasoil (MGO 0.1) dropped 1.9 % to 537.35 USD/t. Amsterdam-Rotterdam-Antwerp (ARA) fuel oil stocks drop 4% on week to 1.214 million mt, according to Global Insights. At the same time, fineries throughput in Europe is considerably below 2019 levels, indicating that demand is far from being recovered.

 

 

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

34.80

37.80

24.98

31.30

36.89

39.15

EUR/MWh

589.45

640.27

348.37

455.95

537.35

546.10

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, Bunkerpost

*An estimate for LNG FOB Risavika 

** An estimate for 10 % LBG blend FOB Risavika