Crude oil has strengthened further overnight
02 June 2020
Demand remained below normal levels for this time of yearThe UK gas system was again comfortably supplied throughout the trading day on Monday as demand remained below normal levels for this time of year with renewable generation providing over 60% of total power demand. UK gas prices reversed Friday’s gains with the front month contract for July shedding 0.84p to settle at a life-of-contract low of 8.79p. The full Quarter 3 contract fell by the same amount and the front winter was down by 0.64p. Prompt gas prices also eased on the day with losses averaging 0.60p as the system comfortably supplied.
Carbon prices eased by 43 cents on the dayUK baseload power futures tracked gas and carbon prices lower on Monday, reversing Friday’s gains across the board. The new front month contract for July shed £0.80 to expire at £24.35/MWh while the Q3 contract fell by £0.60/MWh and Winter 2020 by £0.55/MWh. Carbon prices eased by 43 cents on the day. Day ahead baseload power picked up by £2.00/MWh with wind generation forecast to fall to just 1GW today. Wind availability is forecast to increase later in the week but fall off again next week which saw the week ahead price up by £2.00/MWh.
The new Brent crude front month contract for August gained 48 cents to settle at $38.32 a barrel. The month of May saw the steepest monthly price rise in U.S. crude prices but the first trading day of June saw a levelling off. The US benchmark WTI price ended the day virtually unchanged as it settled down a marginal 5 cents at $35.44 a barrel. Investors in the States were focused partly on bearish factors including US-China tensions, and early indications that US crude-oil production is starting to ramp up again as some recent shut-ins are restored
US crude-oil production is starting to ramp up again