Global crude oil contracts were poised to post a 2.5% weekly increase
17 August 2020
The Langeled pipeline remains the single biggest source of gasDemand on the UK gas system remained on par with recent days as the forecast came in at 150MCM. Deliveries were much more robust than of late with supplies peaking at 163MCM and line pack increasing by 12MCM. The Langeled pipeline remains the single biggest source of gas with flows consistently at 41MCM during the day. Gas market were slow to get going which is typical on a Friday as industry begins to wind down for the weekend. A late surge at the front of the curve saw contracts for the front month and quarter 4 surge by over a penny as these contracts reacted to upward movement on the U.S. Henry Hub. The market was reflecting concern that LNG deliveries from the U.S. could be impacted by higher U.S. natural gas prices.
Day ahead baseload power tracked higherGB power were mixed during Friday’s session with near term contract at the front of the curve pushing higher, mirroring movement on the UK NBP gas curve. Overall, the underlying sentiment remains bearish, and this was reflected in contract further out which finished the day in negative territory. September closed at £37.22/MWh, up by £0.82. Day ahead baseload power also tracked higher as today’s forecast for wind generation was set to fall to just 1.6GW, well down on Friday’s values. While power for the weekend declined to £34.00/MWh, baseload power for Monday increased by £3.25 to £37.25/MWh.
Crude oil prices traded flat during Friday’s market with little new to provide direction for the market. The Brent crude contract traded in a range of less than a dollar and peaked at $45.29 before reaching a low of $44.48 in the afternoon session. Notwithstanding the market being relatively flat, global crude oil contracts were poised to post a 2.5% weekly increase although crude remains in the same range since early July. There are some signs emerging that supplies are coming down which would suggest some increases in Summer demand. At the close, Brent was priced at $44.81 a barrel, down by just 15 cents.
Brent crude contract traded in a range of less than a dollar