Both West Texas and Brent crude gained
24 December 2020
Demand on the gas system remained well below the seasonal normFollowing 3 days of increases which saw near futures gas prices rise by almost 10%, the UK gas market reversed direction on Wednesday. Demand on the gas system remained well below the seasonal norm and the system was well-supplied on the day. Norwegian deliveries ran at near maximum capacity while LNG send-out remained robust. Thanks to the strong supply-demand balance, prompt gas prices at the UK NBP stepped lower on the day with the spot price falling by 3.50p and day ahead by 2.40p. The futures market also reversed the trend of earlier in the week with Q1 21 shedding 1.06p but near futures prices remain almost 6% higher week-on-week.
GB baseload power futures relinquished some of the strong gains of earlier in the weekGB baseload power futures relinquished some of the strong gains of earlier in the week on Wednesday with Q1 21 easing by £1.00/MWh to settle under £60.00/MWh. The front month and February contracts remain above the £60.00 mark, however. EU ETS unit prices gained 76 cent to finish around €32.00 per tonne. Day ahead baseload power eased in line with a sharp drop in prompt gas prices on the day yesterday. The power prompt was softened by a pick-up in wind generation yesterday and forecast higher wind availability today.
The market was focussed on weekly inventory data from the U.S. on Wednesday for any indications of changes in the demand pattern. An across the board decline in crude, distillate, and gasoline stocks, though modest, indicated some increase in demand as people travel for Christmas. The conclusion of months of haggling over a stimulus package was also greeted as a positive for oil demand, although Trump has threatened to veto the bill. Both West Texas and Brent crude gained $1.12 day-on-day, recovering some of the losses of the previous 2 days. Carbon prices also recovered losses from earlier in the week as EU ETS unit prices gained 76 cent to settle around €32.00 per tonne.
Carbon prices also recovered losses from earlier in the week