Maritime Market Update: Full Or Partial Closures Of Refineries In Europe
Risavika LNG gained 5.2 % week on week and settled at 30.54 EUR/MWh for May contracts. The weather forecast turned to warmer but still below seasonal norms in the beginning of May, which supported front month European prices. With temperatures staying below seasonal averages, the gas storages in Europe are still in withdrawal mode, creating more demand for injections in coming months and providing a bullish sentiment to European gas prices.
All oil products have increased following the benchmark crude oil prices on the back of the economic data. Fuel oil 3.5 has increased by considerable 8.8 % and reached 369.06 USD/t for May contracts. Low sulphur fuel oil (MFO 0.5) gained 5.1 % and was at 471.05 USD/t, and marine gasoil (MGO 0.1) gained 5.2 % and settled at 521.33 EUR/MWh. Nevertheless, the demand for oil products remains uncertain due to resurging covid-19 cases in major emerging economies such as Brazil and India.
As an aftermath of the pandemic, European refiners are reporting financial difficulties. Refining margins went below breakeven levels and likely to remain so until oil demand recovery and inventories draw, potentially tightening future supplies. Trading firm Gunvor has permanently shut the two crude distillation units (CDUs) at its 80 000 b/d Europoort refinery in Rotterdam. According to Platts, currently there are more than 3.8 million b/d of refining capacity temporary closed or in a maintenance period in Europe.