Fuel Switch Snapshot: Gas regains some edge

VLSFO tightness persists in major ports

Rotterdam's LNG back at a discount to LSMGO

Dutch biofuel rebates continue to rise

CHART: The dots represent bunker fuel prices adjusted for calorific contents to become VLSFO-equivalents, and with various estimated levels of EU ETS costs in 2024 excluded (Rotterdam) and included (Rotterdam to non-EU port and Rotterdam to EU port). ENGINE, PRIMA Markets, NYMEX

Gas has regained some of its lost advantage in Rotterdam as conventional fuel prices have increased for yet another week, mainly due to tight supply in the port. LNG is now more affordable than LSMGO, although VLSFO still maintains a discount to LNG.

Rotterdam's LNG has shifted from a $25/mt premium over LSMGO to a $2/mt discount in the past week.

Even in Singapore, LNG's premium over LSMGO has narrowed by $30/mt in the past week, and currently stands at just $12/mt.

LNG’s discount to B24-VLSFO HBE in Rotterdam has increased by $23/mt in the past week, bringing LNG to a $79/mt discount compared to the B24-VLSFO blend.

VLSFO

The front-month ICE Brent contract has seen a modest rise of $0.99/bbl ($7/mt) in the past week. Tight availability of conventional fuel grades in Rotterdam has pushed their prices slightly higher than Brent’s uptick. Rotterdam’s VLSFO has increased by $14/mt.

Product loading delays are leading to this tightness in prompt availability, a source told ENGINE.

Singapore’s VLSFO price has remained almost steady with only a $3/mt gain over the past week. Availability remains tight due to strong demand, with some suppliers facing low stock levels, according to a source.

Biofuels

Rotterdam’s B24-VLSFO and B24-LSMGO HBE prices have increased marginally, each adding $10/mt on the week.

PRIMA Markets assessed the Dutch HBE A ticket price to €9.60/GJ ($10.49/GJ) on Friday, up from €9.20/GJ ($10.05/GJ) a week prior. This increase equates to a $93/mt theoretical rebate for B30-VLSFO HBE blends sold in Dutch ports, up by $3/mt on the week.  

Singapore’s B24-VLSFO UCOME price has increased by $7/mt. Its B24-LSMGO UCOME price has risen by a greater $28/mt, amid a similar $29/mt increase in the underlying ENGINE conventional LSMGO price.

The increase in the underlying China UCOME FOB price has also boosted the two benchmarks. PRIMA Markets assessed the UCOME FOB China benchmark at $970/mt on Friday, up by $20/mt from the week prior.

LNG

Rotterdam’s VLSFO-equivalent LNG bunker price has decreased $13/mt in the past week, due to rising gas supply from Norway and lower-than-expected demand due to milder weather.

In Singapore, the LNG price has been almost unchanged, with only a $1/mt decline in the past week. The delay in winter buying, as temperatures stay warmer than expected, is keeping prices stable, Rystad Energy said.

By Konica Bhatt

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