Home Energy Maritime market update: oil product prices moved lower despite the inventories draw

Maritime market update: oil product prices moved lower despite the inventories draw

Risavika LNG front month is up 1.5 % week on week to 21.68 EUR/MWh following increase in European gas markets last week, which were highly impacted by Norwegian maintenances tightening the market.

Oil prices moved lower last week due to Saudi Arabia announcement of cuts in their official selling price (OSP) to Asia and oil import volume reduction in China, thus, oil products prices followed the same trend. Fuel oil 3.5 has dropped by 6 % to 235.48 USD/t, while low sulfur oil products (MFO 0.5 and MGO 0.1) have dropped by 7.4-7.9 % accordingly week on week, despite a draw from the inventories.

Stocks of fuel oil in the Amsterdam-Rotterdam-Antwerp (ARA) hub fell 4% to 1.057 million t in the week Sep 2, according to Insight Global. That followed an 18% fall the previous week to 1.103 million t. Availability of bunker fuel at the Dutch bunkering hub of Rotterdam has become limited, according to the sources of S&P Global Platts. However, it seems that is not enough for now to support the prices as long-term bunker demand remains uncertain.

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

21.68

24.68

16.88

19.83

22.74

24.58

EUR/MWh

367.27

418.09

235.48

288.75

331.22

342.84

USD/t

 Price index 7.9.2020.png

Source: CME Group, Gasum, S&P Global Platts

*An estimate for LNG FOB Risavika

** An estimate for 10 % LBG blend FOB Risavika

Source: Gasum by Evgenia Vanadzina, Analyst