Agreement between OPEC and Russia has underpinned the global price for oil this week
08 January 2021
Gas demand was around 20% above the seasonal normThe GB power and gas markets opened with significant gains on Thursday and the markets continued to firm through the day as temperatures remained just above 0°C. Gas demand was around 20% above the seasonal norm at 405MCM yesterday and an increase in gas fired power generation added to the inflated heating demand. Prompt prices covering the next week gained between 2.30 and 4.10p as the cold spell is expected to break after the weekend. The NBP futures market showed its volatility yesterday and reacted to the gains on the prompt with most of the previous two days losses being reversed
Supply margins tightened in the UK power grid yesterdaySupply margins tightened in the UK power grid yesterday to the extent that supplies seemed to be short for the first half-hour of the peak demand period. Prompt prices had already rallied through the day as the day ahead reversed some of the previous day’s losses and settled above £100/MWh again. Low wind generation along with the current cold snap is set to keep margin tight until the end of the weekend. In the futures market, higher gas and carbon EUAs combined with the increase in the prompt to boost baseload power futures. Contracts settled between £1.00 and £4.20/MWh higher. Carbon prices rose by €1.13 per tonne as the spot closed at €34.64 per tonne.
Crude oil prices closed higher for the third session in a row with Brent settling at a fresh high since the end of February last, although the increase yesterday was modest. The recent agreement between OPEC and Russia to delay their plan for production increases has underpinned the global price for oil this week with some extra comfort coming from the decision of Saudi Arabia to cut its own production levels by 1 million barrels per day in February on concerns that the increasing number nations reintroducing lockdowns will curb demand in the short term. Brent settled at $54.38 a barrel yesterday while West Texas Intermediate gained 20 cents to close at $50.83 a barrel.
Crude oil prices closed higher for the third session in a row