Crude oil markets are bullish this morning
20 January 2021
The gas market broke a four-session losing streakThe UK NBP gas market has experienced dramatic increases and declines over the past few weeks and Tuesday was no exception as the gas market broke a four-session losing streak. Once again price volatility was mostly focused on the front of the curve, but tremors extended to contracts out in the seasons. The front month February contract traded at a high of 58.35p at one stage and reached allow of 55.48p, a spread of 2.87p. This contract eventually settled up by 2.61p at 57.47 while March ’21 closed at 53.15p, up by 2.80 from the previous settlement. The rest of the curve also closed higher with higher crude playing a role along with impending cold weather in the coming days.
The power prompt was generally stable on the day as the system remained comfortableGB baseload curve contracts gained yesterday as this market was driven by a combination of higher gas, crude oil and EUA carbon contracts. To some extent the price movement was surprising given that supply/demand fundamentals remain relatively positive. While the front month February baseload contract remained broadly flat, movement across the remainder of the curve averaged £1.50/MWh. March and April were most impacted where price increases came in at £2.25 and £2.45 respectively. The power prompt was generally stable on the day as the system remained comfortable.
All crude oil markets resumed trading on Tuesday following the Martin Luther King jnr. holiday in the U.S. Markets were bullish from the outset and as we approach the inauguration of Joe Biden in the U.S., a lot of the focus in on this administration’s efforts to kick start the economy. The market is anticipating a boost from the recently announced stimulus package and the potential for increased demand as the economy recovers. The fall out over Trump’s refusal to accept his defeat is also waning and the new administration is set fair to take office. At market settlement the Brent crude contract was priced at $55.97 a barrel, up by $1.19.
Oil markets were bullish from the outset and as we approach the inauguration of Joe Biden in the U.S