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LNG dual-fueled vessels make 10 % of tanker orders in 2020

Risavika LNG front month has increased by 2.4 % week on week to 24.60 EUR/MWh. Colder weather forecast for the rest of November supported European front month gas prices. Still the gas supply side remains healthy and number of LNG cargoes arriving to Europe is increasing, thus, price increase was limited.

Oil market has gained support last week on the vaccine news and hopes for ending the oil demand uncertainty. Following oil prices, oil products have increased 3.3-10.9 % during last week. Fuel oil 3.5 has increased almost 3.8 % to 245.57 USD/t, low sulfur oil (MFO 0.5) has also gained 3.5 % and closed at 308.87 USD/t, and MGO 0.1 has increased by 4.7 %week on week and closed at 340.74 USD/t.

According to Argus Media, shipowners are placing new orders for LNG dual-fuel vessels as refuelling infrastructure improves. Around 10 % of the total tanker orders made so far in 2020 were for LNG dual-fueled vessels, bringing the total number of LNG dual-fueled ships under construction to 55. The number includes three very large crude carriers (VLCC), nine Suezmaxes, twenty two Aframaxes, four Long Range 2 (LR2) and three Medium Range (MR). This shift comes at a time of a global push for more stringent environmental shipping standards. The International Maritime Organization (IMO) is targeting a reduction in CO2 emissions of 40 % by 2030 and 70 % by 2050, both from a 2008 baseline. The IMO is also aiming at a 50 % reduction in overall greenhouse gas (GHG) emissions from the same baseline by 2050, which is encouraging shipping to explore and adopt new propulsion technologies.