The oil markets were relatively subdued
21 January 2021
Demand increased with falling wind availabilityAs temperatures began to fall, the UK gas system shifted from a comfortable supply surplus yesterday morning to finish with a supply deficit of 8MCM at close of business. Demand increased with falling wind availability, adding gas-fired power demand to additional heating demand over the course of the day and the spot price gained 0.40p. The week ahead and front month contracts eased marginally however as did contracts right along the curve. Q4 2021 recorded the only significant move, gaining 0.53p day-on-day but this was hardly remarkable in the context of recent market volatility.
Demand on the GB power grid was below normal yesterday morningDemand on the GB power grid was below normal yesterday morning but falling temperatures drove demand higher through the day. The increased demand saw more gas-fired plant come on-line while wind availability fell at the same time. Day ahead baseload power ticked up fractionally while the week ahead contract shed £2.00/MWh. The front month GB baseload power contract fell by £1.20/MWh yesterday but movement beyond that was only fractional. Movement on the UK gas market provided little directional pressure and carbon price movement was equally limited.
The oil markets were relatively subdued with much focus on events in Washington yesterday. Brent crude gained slightly, settling at $56.08 a barrel. West Texas Intermediate gained 25 cents to close at $53.24 a barrel as the inauguration of Joe Biden as U.S. President took place without any trouble in Washington or elsewhere. The new stimulus package promised by the Biden Administration could strengthen the U.S. economy and trigger higher demand for oil. OPEC’s commitment to hold back production levels to tighten supplies has also lent support to crude oil prices in recent days.
Brent crude gained slightly, settling at $56.08 a barrel.