Home Offshore Energy Gasum maritime market update: oil products prices rise despite the inventories build

Gasum maritime market update: oil products prices rise despite the inventories build

A further drop for Risavika LNG front, it reached 27.62 EUR/MWh and 2.8 % lower week-on-week. European front month gas prices are more on a bearish side due to warmer weather forecast for the rest of February and anticipation of more LNG cargoes in March.

Oil products continue to rise on benchmark crude prices gaining more than 5 % last week. Fuel oil 3.5 has increased 4.2 % and closed at 348.66 USD/t for front month contracts. Low sulfur oil (MFO 0.5) has gained 3.5 % and closed at 453.22 USD/t, and marine gasoil (MGO 0.1) has increased 2.5 % week on week and closed at 493.11 USD/t.

Oil prices remain a main driver for the oil products increase despite the inventories in the Amsterdam-Rotterdam-Antwerp (ARA) trading hub rising to their highest since 8 October, according to Insights Global. Euroilstock data revealed that the inventories in the EU-15 plus Norway were higher in January 2021 than January 2020. With crude intake still critically low, rising stocks is a function of poor demand as countries across Europe remain in lockdown. The IEA expects a rapid drawdown of global oil stocks in July-December, but warned of a fragile outlook for demand recovery during the first half of the year. Renewed lockdowns, stringent mobility restrictions and a rather slow vaccine roll-out in Europe have delayed the anticipated rebound.

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

27.62

30.62

25.00

31.12

33.86

36.03

EUR/MWh

467.90

518.72

348.66

453.22

493.11

502.57

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, Insights Global, IEA

*An estimate for LNG FOB Risavika

** An estimate for 10 % LBG blend FOB Risavika