Gas Price Drop Narrows Premiums for LBM and LNG Over Fuel Oil
The recent slide in gas prices has narrowed the premiums of liquefied biomethane (LBM) and liquefied natural gas (LNG) over fuel oil in key bunker markets. In Rotterdam, LBM’s premiums over high-sulfur fuel oil (HSFO) have decreased by $101-103/mt, while its premiums over very low-sulfur fuel oil (VLSFO) have also narrowed by $58-60/mt. Meanwhile, LNG’s premiums over VLSFO have dropped by $53-55/mt in Rotterdam and by $52-53/mt in Singapore, as gas prices have fallen more sharply than those of liquid fuels.
B100 biofuel has seen significant shifts in its pricing dynamics. In Rotterdam, the premium of B100 over VLSFO has widened by $37/mt to $40/mt, while in Singapore, it has surged by $21/mt to $340/mt. Notably, Singapore’s B100 has drawn level with low-sulfur marine gas oil (LSMGO), a shift from a previous $96/mt discount. The narrowing of B100’s discounts to LNG in Singapore has also been notable, dropping by $73-74/mt.
The price movements reflect broader market trends, including tighter fuel availability in the ARA and delayed cargo arrivals in Singapore due to Middle East conflicts. Rotterdam’s HSFO price has risen by $10/mt, while VLSFO and LSMGO prices have fallen by $33-65/mt. In Singapore, VLSFO and LSMGO prices have dropped by $22-97/mt. LNG prices have declined significantly, tracking falls in the Dutch TTF natural gas contract and the Japan/Korea Marker (JKM), with analysts attributing the drop to potential US-Iran discussions.
Other notable changes include the flipping of Rotterdam’s B30-VLSFO from a $32/mt discount to a $2/mt premium over VLSFO, and the slight decline in FuelEU Maritime pooling values for both LBM and B100. OceanScore’s FuelEU pooling index has held steady at €108.60/mtCO2e ($124/mtCO2e), despite a weaker euro.