Brent eased by 33 cents a barrel preventing a run of ten straight gains
12 February 2021
High LNG send out calmed fears of tight supplies in the UKHigh LNG send out calmed fears of tight supplies in the UK yesterday pressuring the prompt and futures market. In December and January concerns were raised of LNG cargoes being diverted to Japan while the EAX, the Asian LNG price, soared on account of a long spell of artic weather. Now having eased back, the EAX is a less attractive market for surplus supplies of LNG and cargoes have returned to the UK. This was evident on Thursday as LNG send out topped 140MCM. There were also forecasts for temperatures to increase from next week and so the prompt shed between 3.60p and 6.75p. The front month March declined by 3.48p yesterday or 8.68p over the last three sessions.
An easing of carbon EUAs fed into the baseload power futures marketA sharp decline in gas prices at the front of the curve along with an easing of carbon EUAs fed into the baseload power futures market on Thursday. The March contract eased by £2.60/MWh while contract further along the curve averaged declines of £0.50/MWh. Carbon EUAs fell by 57 cent per tonne leaving the 2021 contract at €38.76 per tonne. Forecasts for increased temperatures for next week along with sharp declines on the NBP prompt pressured the baseload prompt market yesterday. The forecast also included an increase in wind generation which added to the downside. The day ahead product shed £12.91/MWh and settled at £58.81/MWh
The recent rally in crude oil prices was halted yesterday as Brent eased by 33 cents a barrel preventing a run of ten straight gains. West Texas Intermediate closed 44 cents a barrel down at $58.24 a barrel. The downward move concluded a record equalling streak of increases after both OPEC and the IEA said the prospect of a prompt recovery in demand is now less likely with the emergence of new variants of the coronavirus. A representative from OPEC said that 2021 global oil demand would recover slower than previously thought while the IEA stated that global supply is still ahead of demand.
The recent rally in crude oil prices was halted yesterday