Archived Summaries

Tuesday 21 August 2012
Market Close
 The oil market continued its upward momentum on Tuesday with front month Brent increasing from the low of $89.23 recorded on 21st June this year to close at $114.64.  Increasing confidence that the crisis in the Euro may at last be easing as a result of action anticipated by the European Central Bank was evident with the news that the cost of borrowing for Spain had fallen at the auction on Tuesday from previous levels.  Oil further out than the front month currently carries a discount with Brent for delivery in January 2014 closing at $107.75, a discount of $6.89 on the price of front month crude suggesting that the current front month price may not be sustained.  Brent closed $0.94 higher a barrel on the day with Nymex also moving higher by $0.71.  The UK system was in balance on Tuesday with supplies of 171 MCM keeping pace with demand. Despite the increase in the price of oil the healthy gas supply position took some of the pressure off the prompt with the within day and day ahead closing lower by 0.20p and 0.05p respectively.  The balance of gas prompt and future contracts all increased as oil moved higher.  Winter 2012 increased by 0.13p to close at 66.78p while the average futures increase was just 0.16p.