Oil futures are on the rise with gradual reopening in US
18 May 2020
Seasonal contracts beyond the front winter saw some significant gainsFriday saw the UK gas system enjoy more balanced supply-demand than had been the case for some days. Demand on the system fell to near normal levels for this time of year as exports to mainland Europe were down significantly from levels of earlier in the week. With the comfortable supply-demand balance prevailing, prompt gas prices eased by an average of 0.30p. On the futures market, contracts for the remainder of the year recorded marginal movement in either direction with the front month finishing 1.39p lower week-on-week and Q3 down 1.76p. Seasonal contracts beyond the front winter saw some significant gains on the day with most up by over a penny week-on-week.
Carbon prices moving towards €20.00 per tonne againGB baseload power prices for the remainder of the year finished lower week-on-week while contracts beyond the front winter finished higher. The futures market move-ment was largely in line with gas movement on the day and indeed, for the week. EU ETS unit prices gained for a second day with carbon prices moving towards €20.00 per tonne again. The day ahead price fell by almost £5.00/MWh as temperature and wind generation levels were forecast higher for today. The full week ahead price for this week was up by £0.625/MWh however as wind and solar generation levels for the remainder of the week are forecast mixed.
The crude oil market rally continued on Friday with Brent crude gaining $1.37 to settle at $32.50, up 5% week-on-week. The pace of recovery of U.S. crude oil futures quickened on Friday, with the front month contract for West Texas Intermediate gained $1.64, up 5.9%, to settle at $29.52 per barrel. This was the highest settlement for the contract since April 13. Oil futures are on the rise thanks to the gradual reopening of regions throughout the US, which traders expect will boost gasoline consumption. The recovery in the Brent crude price is slower, reflecting the more cautious reopening of business in other parts of the world.
The pace of recovery of U.S. crude oil futures quickened on Friday