- European Gas Storage Levels Drop Further.
- LNG Bunker Fuel Prices Fall in Sines.
- MABUX Market Differential Index Fluctuates Across Ports.
At the close of the 11th week, the worldwide bunker indices MABUX showed an unpredictable trend, moving in opposite directions. The 380 HSFO index increased by $6.23, advancing from $495.53/MT to $501.76/MT, again crossing the $500 level. In contrast, the VLSFO index continued its downtrend, falling by $1.80 to $580.05/MT, remaining below $600/MT. The MGO index also declined, losing $6.20 to $764.82/MT, reports LinkedIn.
Scrubber Spread Continues Downward Trend
The MABUX Global Scrubber Spread (SS)—the spread between 380 HSFO and VLSFO prices decreased by $8.03, down from $86.32 to $78.29. This brought the spread below the $80 level and well below the $100 breakeven level. The seven-day average of the index also decreased by $4.72.
On the Rotterdam, SS Spread lost by $5.00 from $63.00 to $58.00 and the weekly average fell by $9.83. In the same manner in Singapore, HSFO/VLSFO price disparity narrowed even lower by $17.00 to $45.00 from $28.00. One week, the spread on Singapore got narrower even more to $23.00 from which the weekly average dropped even lower by $12.83.
Natural Gas Supply Issues Affect Prices
Above-average storage withdrawals have resulted in gas supply depletion in both Europe and the U.S., raising concerns of possible shortages. With inventories at below-normal levels, the replenishment process could be delayed, especially if cold weather continues or production continues to be constrained.
In the short term, natural gas prices are likely to remain high due to reasons like robust demand, scarce supply, and geopolitical concerns. Weather forecasts will have an impact on short-term price fluctuations, but longer-term trends will be driven by global LNG logistics, trade patterns, and geopolitical incidents.
European Gas Storage and TTF Market Movements
As of March 11, European regional storage facilities were 35.88% full, reflecting a 1.75% decrease from the previous week and a 35.45% drop since the beginning of the year. The withdrawal of gas from storage remains ongoing.
By the end of the 11th week, the European gas benchmark TTF posted a minor drop of 0.754 euro/MWh, going from 43.464 euro/MWh to 42.710 euro/MWh. Early indicators of a new upward move have already begun to appear, though.
LNG Bunker Fuel Prices Fall
The LNG bunker fuel price in Sines (Portugal) decreased by $66 in the last week to $833/MT on March 10. The difference between LNG and traditional fuels also reduced, with MGO LS at $732/MT, which led to a $71 advantage of MGO LS over LNG, from a $124 advantage last week.
MABUX Market Differential Index Trends
By the end of Week 11, the MABUX Market Differential Index (MDI)—an indicator of the market bunker prices (MBP) to digital bunker benchmark (DBP) ratio—registered fluctuations at each of the four key global hubs: Rotterdam, Singapore, Fujairah, and Houston.
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Source: LinkedIn
