Fuel Switch Snapshot: Gas slide narrows LNG and LBM premiums over fuel oil

B100's premium over VLSFO widens to $40/mt in Rotterdam

Singapore's B100 draws level with LSMGO

Rotterdam's B30-VLSFO swings to $2/mt premium over VLSFO

All bunker prices described in the text below have been adjusted for calorific content to make them VLSFO-equivalent. They have estimated EU-EU voyage compliance costs included for Rotterdam, and nonEU-EU compliance costs included for Singapore. These account for EU ETS costs and FuelEU Maritime penalties, and the average price of compliance surpluses we have picked up from the FuelEU pooling market over the past week.

Liquefied biomethane's (LBM) premiums over HSFO in Rotterdam have narrowed by $101-103/mt to $233-361/mt depending on engine type over the past week. LBM has fallen by $91-93/mt, while HSFO has gained $10/mt.

LBM's premiums over VLSFO have narrowed by $58-60/mt to $162-290/mt, and its discounts to LSMGO have widened by $26-28/mt to $323-452/mt depending on engine type, as LBM has fallen further than both grades.

LBM's premiums over B100 have narrowed by $94-96/mt to $122-251/mt depending on engine type. B100 has edged up by $4/mt over the same period.

ENGINE-assessed FuelEU Maritime pooling values for LBM have slipped by $3/mt for both engine types, which has held back part of LBM's fall.

LNG's premiums over VLSFO have narrowed by $53-55/mt to $240-364/mt in Rotterdam and by $52-53/mt to $342-404/mt in Singapore, depending on engine type, as LNG has fallen further than VLSFO at both ports.

In Rotterdam, LNG's discounts to LSMGO have widened by $22-23/mt to $250-374/mt depending on engine type, as LNG has fallen more than LSMGO.

In Singapore, LNG burnt in diesel slow speed (diesel SS) engines has flipped from a $21/mt discount to LSMGO to a $1/mt premium, as LSMGO has fallen by $97/mt against a $74/mt drop in LNG (diesel SS).

The premium of LNG burnt in Otto medium speed (Otto MS) engines over LSMGO has widened by $22/mt to $64/mt.

Rotterdam's B100 premium over VLSFO has widened by $37/mt to $40/mt, as VLSFO has fallen by $33/mt while B100 has edged up by $4/mt.

In Singapore, the premium has widened by $21/mt to $340/mt, as VLSFO there has fallen by $22/mt.

B100's discount to LSMGO in Rotterdam has narrowed by $68/mt to $574/mt, as LSMGO has fallen by $65/mt.

In Singapore, B100 has drawn level with LSMGO, from a $96/mt discount, as LSMGO has fallen by $97/mt while B100 has slipped by $1/mt. Singapore's B100 discounts to LNG have narrowed by $73-74/mt to $1-64/mt depending on engine type.

Rotterdam's B100 premium over HSFO has narrowed by $6/mt to $111/mt.

B30-VLSFO has flipped from a $32/mt discount to VLSFO to a $2/mt premium, as VLSFO has fallen by $33/mt while the blend has held steady.

ENGINE-assessed FuelEU Maritime pooling values for B100 have dropped by $3/mt in Rotterdam on a weaker euro, which has added to B100's rise.

OceanScore's FuelEU pooling index has held at €108.60/mtCO2e ($124/mtCO2e) over the past week, with its dollar value down by $1/mtCO2e as the euro has weakened.

Liquid fuels

Rotterdam's HSFO price has gained $10/mt over the past week, while VLSFO and LSMGO prices have fallen by $33-65/mt, with LSMGO down the most. Rotterdam's B100 price has edged up by $4/mt, while B30-VLSFO has held steady.

Prima Markets' Dutch ZRE A tickets have fallen by €15/mtCO2e ($19/mtCO2e) to €175/mtCO2e ($199/mtCO2e) over the past week.

Fuel availability in the ARA is tight for prompt delivery dates, and buyers are recommended lead times of 5-7 days, a trader said.

Singapore's HSFO price has gained $4/mt, while VLSFO and LSMGO prices have fallen by $22-97/mt, with LSMGO down the most. Singapore's B100 price has slipped by $1/mt.

Singapore's recommended VLSFO lead times are 13-17 days, as most suppliers hold low stocks and cargo arrivals linked to the conflict in the Middle East have been delayed, according to a Singapore-based source.

Front-month ICE Brent futures have rallied $4.06/bbl ($30/mt) higher to $104.81/bbl ($768/mt) over the past week, while Dec26 EUA prices have fallen by $2.39/mtCO2e to $97.19/mtCO2e.

Liquid gases

Rotterdam's LNG prices have fallen by $86-88/mt depending on engine type over the past week, tracking a fall in the front-month Dutch TTF natural gas contract. IEA gas analyst Greg Molnár said the recent fall in gas prices can be attributed to the "reemergence of negotiations on the Strait of Hormuz".

Rotterdam's LBM prices have fallen by $91-93/mt depending on engine type.

Singapore's LNG prices have fallen by $74-75/mt depending on engine type, as the front-month Japan/Korea Marker (JKM) has declined.

"The decline followed indications that direct US-Iran discussions remained possible," oil and gas analysts at research firm BMI said.

By Erik Hoffmann

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