Oil prices gained despite data from the U.S. suggesting further demand destruction
03 December 2020
The day ahead contract gained just over a pennyColder weather saw demand on the UK gas system increase to 315MCM on Wednesday. An early supply surplus of 15MCM was halved over the course of the trading day but the system remained in surplus at close of business. The day ahead contract gained just over a penny but remaining prompt contracts saw lesser gains. Trading on the UK gas market has been relatively calm for the first 2 days of December, compared to the strong upward trend of late November. Yesterday saw a reversal of the modest losses recorded on Tuesday with the biggest gain amounting to just 0.40p.
The GB power market recovered Tuesday’s losses with interest as carbon prices moved higher again yesterday. Longer dated contracts recorded the strongest gains as EU ETS unit prices settled above €29.50 with the 2022 contract finishing at €30.00 per tonne. The recent volatility on the prompt power market subsided as day ahead baseload eased by just £0.27/MWh yesterday. Wind generation levels fell to 7GW but are forecast to increase for today and the remainder of the week.
The GB power market recovered Tuesday’s losses
In a counter-intuitive move yesterday, oil prices gained despite data from the U.S. suggesting further demand destruction. The weekly inventory data from the U.S. Energy Information Administration showed increased stocks of crude, distillate, and gasoline week-on-week. The market moved higher despite this as optimism increased that OPEC and Russia will agree to extend production cuts when their summit concludes today. Brent crude gained 65 cents to settle at $48.25 while West Texas Intermediate was up 73 cents to $45.28 a barrel. Carbon prices also gained on Wednesday with EU ETS unit prices settling above €29.50 per tonne.
Carbon prices also gained on Wednesday with EU ETS unit prices settling above €29.50 per tonne