Evgenia Vanadzina Gasum

Evgenia Vanadzina

Portfolio Manager
evgenia.vanadzina@gasum.com
tel. +358401801066

03.11.2020  

Maritime market update: The LNG industry is awaiting the winner of the Trump/Biden contest

Risavika LNG front month has dropped 4.5 % week on week reaching 24.06 EUR/MWh on the healthy and stable gas supply to European markets, high gas storage levels and milder outlook on the weather in November.

Oil prices has lost almost 10 % during last week on new lockdown restrictions in Europe, rising covid-19 cases around the world, which add to demand uncertainty, and increase of Libyan oil production, which can potentially add more than 1 million barrel per day to an already oversupplied market. Following the oil prices, fuel oil (FO 3.5) has lost 11.7 % to 217.50 USD/t, low sulfur oil (MFO 0.5) has decreased by 10 % and closed at 275.24 USD/t, and  MGO 0.1 has lost 8.7 % week on week and closed at 302.06 USD/t.

Meanwhile, the most awaited news for this week are the results of the US election and potential impact on energy industry. Biden has called for a swift pivot to clean energy, while Trump makes the case for the country’s abundant fossil fuel resources and an “energy dominance” agenda. The winner will control regulations that could hinder or accelerate growth across energy sectors and markets and help to direct investment. Analysts see Biden preserving a role for gas, his climate plan would invest $2 trillion in renewable power, electric grid upgrades, green building initiatives and other clean energy initiatives that would displace fossil fuels. Biden could end the tariffs between Washington and Beijing that have restrained US LNG exports to China and made commercial development more challenging. Alternatively, President Donald Trump could make it easier to drill for the shale gas that feeds terminals and further speed up project permitting. The US LNG industry faces a critical year in 2021, during which new capacity may be sanctioned or fall off the board altogether.

 

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

 

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

24.06

27.06

15.59

18.90

20.74

21.98

EUR/MWh

407.59

458.41

217.50

275.24

302.06

306.56

USD/t

Price index 2.11.2020.png

Source: CME Group, Gasum, HellenicShippingNews

*An estimate for LNG FOB Risavika 

** An estimate for 10 % LBG blend FOB Risavika