- Gas Market Rebounds Amid Rising Conventional Fuel Prices.
- LNG Gains Competitiveness in Rotterdam and Singapore.
- Tight Supply Drives Up VLSFO Prices in Rotterdam.
Gas recovered some of the lost competitiveness in Rotterdam as conventional fuel prices skyrocketed due to tight supply in the port. For example, LNG became less costly than LSMGO while VLSFO remains at a discount versus LNG, reports Engine.
LNG Gains Competitiveness
LNG in Rotterdam moved from $25/mt premium over LSMGO for the previous week to $2/mt below LSMGO for the current week. Meanwhile, Singapore has reduced its LNG premium over LSMGO by $30/mt and is now marked at $12/mt above.
The discount of LNG over B24-VLSFO HBE in Rotterdam increased by $23/mt and LNG was pegged at $79/mt below the B24-VLSFO blend.
VLSFO Market Trends
The front-month ICE Brent contract climbed incrementally by $0.99/bbl or $7/mt during the past week. Current prices are being driven up more by tight conventional fuel-grade supplies in Rotterdam, rather than the Brent advance. Thus, Rotterdam VLSFO prices rose by $14/mt. A source attributed product loading delays as causes for this supply tightness curtailing prompt availability.
VLSFO prices in Singapore are little changed, up by $3/mt on the week. Strong demand and low stock levels among some suppliers continue to support tight availability.
Biofuels Market Insights
Rotterdam’s B24-VLSFO and B24-LSMGO HBE prices are up by $10/mt over the past week. On Friday, PRIMA Markets placed Dutch HBE A at €9.60/GJ ($10.49/GJ), up from €9.20/GJ ($10.05/GJ) a week ago. This would move into a theoretical rebate of $93/mt on B30-VLSFO HBE sold in Dutch ports which is up $3/mt week-on-week.
In Singapore, B24-VLSFO UCOME prices rose by $7/mt while the benchmark B24-LSMGO UCOME price gained by $28/mt as a result of strengthening $29/mt underlying ENGINE conventional LSMGO. Underlying UCOME FOB China price also firmed up, lending further support to these benchmarks. PRIMA Markets put an assessment of the UCOME FOB China benchmark at $970/mt on Friday and was $20/mt higher for the week.
LNG Price Movements
Rotterdam LNG bunker price equivalent for VLSFO has fallen by $13/mt over the past week, as upstream gas supply from Norway continues to increase, and demand is lower than anticipated due to less severe winter weather.
LNG in Singapore has been stable and decreased only by $1/mt over the week. Buying activity, which had been lagging due to warmer-than-expected temperatures, was steady, according to Rystad Energy.
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Source: Engine
