Crude oil markets continued to rise overnight
25 November 2020
The gas markets opened firmer on Tuesday and after few hours of sideways tradingThe gas markets opened firmer on Tuesday and after few hours of sideways trading, prices continued to rise late in the session. The remaining months of the winter settled around a penny higher while contracts after the winter racked up gains of around a half a penny. The energy markets remained buoyed by news of the Oxford vaccine as there were increases in crude oil and carbon also. On the prompt, all products recorded increases of over 1.50p as cooler temperatures and lower wind generation lifted demand on the UK gas system. Gas demand was 241MCM, but supplies were comfortable with a modest surplus for most of the session.
As gas futures on the NBP rose yesterday there was a similar showing in GB power futures on TuesdayAs gas futures on the NBP rose yesterday there was a similar showing in GB power futures on Tuesday with remaining winter month contracts closing over £1.10/MWh higher on average. Further out gains were more modest as baseload contracts from the summer settled around £0.45/MWh up on average. Baseload for the day ahead rose sharply on Tuesday as forecasts for lower wind generation coupled with cooler temperatures are expected to put a squeeze on supply margins. Margins were negative at times yesterday and the day ahead product gained £4.62/MWh.
The crude oil markets continued to be buoyed by the latest vaccine news and Brent added $1.80 a barrel yesterday or $4.66 over the last three days. Both benchmarks are now at the highest levels since early March. The markets seemed unconcerned with the latest figures from the American Petroleum Institute yesterday which showed a larger than expected gain in U.S. stocks last week as demand is impacted by increased Covid-19 restrictions. There are some fears that the Thanksgiving holiday will cause a further surge in new cases across the States. OPEC are due to meet over the weekend and it now seems likely they will agree to defer the increase in production planned for January 2021.
The crude oil markets continued to be buoyed by the latest vaccine news