Crude oil has weakened further overnight
23 December 2020
Prompt gas prices stepped higher againUK gas prices gained strongly for a second consecutive day on Tuesday. Demand on the UK gas system rose slightly yesterday due mainly to increased gas-fired power generation. Heating demand was static as relatively mild weather persisted across the UK and Ireland but a fall-off in wind generation saw CCGT generation plant providing almost 60% of UK power demand on the day. Prompt gas prices stepped higher again, with gains averaging 2.80p while the front month was up by 2.52p, or 5%, day-on-day. Q1 21 gained 2.25p to trade above 50.00p for the first time in 12 months while seasonal contracts beyond Summer 21 recorded gains averaging 0.63p.
GB baseload power futures tracked gas and carbon market movement higher yesterdayGB baseload power futures tracked gas and carbon market movement higher yesterday with the front month gaining £3.20 and Q1 £2.75/MWh. Near futures power prices are trading above £60.00/MWh for the first time this winter. EU ETS unit prices gained 25 cent to finish in a range between €31.00 and €32.99 per tonne. The day ahead baseload power price eased despite another sharp rise in prompt gas prices on the day yesterday. The fall in the power price was down to an expected recovery in wind generation levels today and lower demand for the rest of this week.
Crude oil prices fell by over $3.00 intra-day with Brent crude dipping to $49.20 but the global benchmark rallied late on to settle $1.35 lower at $50.91 a barrel. The U.S. benchmark, West Texas Intermediate, settled 72 cents lower at $47.02. The oil market is reacting to new travel restrictions imposed by over 50 countries as a result of the new strain of Covid-19 identified in the UK. The new restrictions will immediately impact the aviation industry and there is no certainty surrounding their possible duration. The market will focus on weekly inventory data from the U.S. today for any indications of changes in the demand pattern.
Crude oil prices fell by over $3.00 intra-day with Brent crude dipping to $49.20