Maritime market update: bearish LNG and stronger oil products

Risavika LNG has dropped a significant 6.7 % week on week to 88.75 EUR/MWh following stronger LNG supplies to the market. Europe has been the top destination for US LNG cargoes, according to Reuters, outpacing exports to Asia for the second month in a row. Warmer than expected weather in Asia and healthy stockpiles last months helped swing LNG cargoes to Europe, where supply has been tight due to lower pipeline flows from Russia and low natural gas inventory levels. Warmer weather in Europe and higher renewable power production contribute to current bearish sentiment, however, the sentiment can change with weather forecast change closer to March.

Benchmark oil prices remained strong for the last week with Brent crude keeping the level above 90 USD/BBL, despite the decision of the Organization of the Petroleum Exporting Countries and its allies to continue with the plan to boost global production by another 400 000 BBL/D in March. However, member states have been unable to produce oil at their assigned quota levels, which will not alleviate the global supply-demand deficit. In Europe, record-high natural gas prices have led refiners to reduce production in Europe to save on cost, leading to tightened inventories and impacting the prices. Fuel oil 3.5 (FO 3.5) price was up 2.7 % to 500.72 USD/t, low sulphur oil (MFO 0.5) gained 4.5 % to 643.93 USD/t and marine gasoil (MGO 0.1) was higher by 5.4 % to 796.48 USD/t week on week.

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
88.75	91.75	35.90	44.21	54.68	59.04	EUR/MWh
1503.48	1554.30	500.72	643.93	796.48	823.41	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, Reuters, OilPrice

*An estimate for LNG FOB Risavika

** An estimate for 10 % LBG blend FOB Risavika