Recent inventory data is suggesting some growth in oil demand.
18 December 2020
Some adverse weather conditions over the weekend are preventing a number of LNG tankers from docking.The UK gas system opened undersupplied on Thursday morning and early forecasts suggested the system would run 16MCM short. The main drivers for the system deficit were an increase in demand from conventional gas generation and some reductions in send out from LNG terminals. Some adverse weather conditions over the weekend are preventing a number of LNG tankers from docking. This is only a short-term problem which was borne out by the market which was happy to mark gas contracts lower for the second session in a row. The downward trajectory was welcome given the strong gains in the market in recent weeks.
The losses on baseload contracts were somewhat pared by increase in crude oil pricesGB baseload power futures market continued to move lower reflecting the falls in the gas market for the past two days. The losses on baseload contracts were somewhat pared by increase in crude oil prices and continued strength in EUA carbon allowances which have gained by $12 a tonne over the last month. Wind generation levels remained healthy at 10GW on Thursday and were expected to increase in the coming days. as a result, the day ahead baseload contract eased lower. At settlement, day ahead was priced at £49.75/MWh, down by £1.80.
Crude oil prices moved higher once again on Thursday as the market continued to respond to a number of positive developments. The roll out of the Covid 19 vaccine across the globe continues apace and this has given a major boost to sentiment around crude oil demand. In addition, the imminent change in the U.S. administration has seen more optimism emerge around a consensus in the Congress on a significant stimulus package. Recent inventory data is also suggesting some growth in oil demand. Both the Brent and WTI contracts moved to 10-month highs as they settled at $51.60 and $48.38 respectively.
Crude oil prices moved higher once again on Thursday