Crude oil prices gained for a seventh straight session
08 June 2020
Gas market picked up on the surge in oil prices to record gainsThe gas market picked up on the surge in oil prices to record gains for a fourth consecutive day. The ongoing strong gains saw the front month contract gain almost 50% week-on-week. In a continuation of the recent pattern, contracts on the near curve recorded the strongest gains with prices for Quarter 3 up by just over a penny. Winter 20 was up by 0.84p and Summer 21 by 0.61p but movement beyond that was modest despite the strengthening oil market. Prompt gas prices were less impacted by oil market movement and the spot price was cushioned by a positive supply situation on Friday. The week ahead and balance-of-month gained 0.75p and 0.85p as wind availability is forecast lower and gas demand for CCGT plant is expected to rise.
Carbon prices hit a 3-month high on FridayUK baseload power prices recorded strong gains across the board baseload futures up by an average of almost £1.00/MWh on rising oil and emissions prices. Carbon prices hit a 3-month high on Friday with the EU ETS unit price for this year closing at €23.24 and the 2020 price topping €24.00 per tonne. A forecast for lower wind generation saw the day ahead price gain £2.55 to £29/MWh. Wind and solar generation are expected to remain subdued this week, requiring more expensive gas-fired plant to come on to substitute.
Crude oil prices gained for a seventh straight session with Brent adding 5.75% on the day and 12.75% week-on-week. The global benchmark moved above $40.00 a barrel for the first time in 3 months adding $2.31 to settle at $42.30 while West Texas Intermediate gained $2.14 to settle at $39.55 a barrel. The surge in prices came on several bullish developments on Friday. OPEC and Russia were reported to be in agreement to extend current production cuts until the end of July and U.S. unemployment data for May was better-than-expected. Last week also saw drilling activity in the U.S. fall to a 19-year low.
Surge in prices came on several bullish developments on Friday