The Norwegian oil workers’ strike was reported to be resolved
12 October 2020
The UK gas market ended the week on a softer noteThe UK gas market ended the week on a softer note but accumulated gains over the week meant that prices for the coming 12 months all finished around 5% higher week-on-week. Norwegian deliveries made up around 50% of total supply on the day. The well-supplied UK gas system steadied the prompt gas market which saw only fractional movement in either direction on Friday. The front month contract shed 0.40p and the Q1 2021 contract was down by 0.41p. Seasonal contracts for Summer 2021 and beyond recorded only marginal losses on the day.
Carbon prices fell to finish at an 8-week lowBaseload power futures moved lower in line with falling fuel and carbon prices on Friday but remained higher week-on-week. Carbon prices fell to finish at an 8-week low of under €26.00 per tonne, the 2021 contract settling at €25.71 per tonne. The day ahead contract gained just over £2.50 to settle at £48.75/MWh as wind generation was forecast lower for today. Despite forecast lower temperatures, the week ahead contract eased by £0.65/MWh as wind is expected to recover as the week progresses.
Crude oil prices eased on Friday as a number of factors combined to bolster supply amid continuing weakness in demandCrude oil prices eased on Friday as a number of factors combined to bolster supply amid continuing weakness in demand, despite further weakening of the dollar against other major currencies. U.S. production looked set to rise after Hurricane Delta passed without major incident and the U.S. rig count increased last week for the first time in months. The Norwegian oil workers’ strike was reported to be resolved, also contributing to a stronger supply outlook. Brent crude fell by 49 cents to settle at $42.85 a barrel while West Texas Intermediate fell by $1.56 to $40.60 a barrel.
With cooler weather prevailing across Britain and Ireland, demand on the gas system has risen to almost 230MCM. The system is comfortably supplied however and is currently forecast 7MCM long for today. In addition to increased heating demand, gas-fired power generation demand is higher today due to reduced wind generation. The prompt gas market has not kicked off as yet but trading on the futures market has seen the front month fall by a penny from Friday’s closing level. Summer 2021 is down also, shedding 0.57p to trade at 34.00p flat. Crude oil continues to retreat with Brent crude down another 50 cents to $42.28 a barrel.
Crude oil continues to retreat