A further drop in Risavika LNG front month to 25.80 EUR/MWh, a 2.9 % reduction as of Friday last week. European gas prices adjusted lower due to seasonal change and expectations of warmer than usual start of March. Gas storage levels in Europe are currently around 37% full compared to 60% full at the same time last year, based on the latest Gas Infrastructure Europe data. Storages will need to be topped up significantly in the coming months, providing support to gas prices.
Oil prices continued gaining as benchmark oil prices were at high levels and most of the products showed inventories draw on week ending 26th of February. Most significant gain was for fuel oil 3.5 which has increased 4 % and closed at 359.35 USD/t for front month contracts on a back of inventory draw. Low sulfur oil (MFO 0.5) has gained 2.3 % and closed at 469.4 USD/t, and marine gasoil (MGO 0.1) has increased by 1.8 % week on week and closed at 521.16 USD/t.
Despite the unprecedented volatility, global demand for LNG increased to 360 million tons in 2020. Though marginal, the growth reflected the resilience and flexibility of LNG. LNG bunker demand is expected to grow from just above 1 million tons in 2020 to 3.5 million tons in 2023, according to recently published Shell’s LNG Outlook 2021. This growth is based on the addition of more than 200 LNG fueled ships to the current fleet and they would be supplied by 45 bunker vessels planned to be in operation by 2023.
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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 |
|
25.80 |
28.80 |
25.76 |
32.23 |
35.78 |
38.08 |
EUR/MWh |
|
437.07 |
487.89 |
359.25 |
469.40 |
521.16 |
531.18 |
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, Shell
*An estimate for LNG FOB Risavika
** An estimate for 10 % LBG blend FOB Risavika
