The oil market continues to strengthen with Brent crude up
15 February 2021
Near futures contracts recorded modest gains following the steep losses of the previous 3 sessionsWhile temperatures remained well below the seasonal norm, demand on the UK gas system fell significantly as wind generation provided almost 30% of GB power demand on Friday. The surge in wind generation reduced gas-fired power demand and the gas system was over-supplied throughout the trading day. Prompt gas prices eased again with the day ahead contract for today down by 2.55p although the week head for this week fell by just 0.50p. Near futures contracts recorded modest gains following the steep losses of the previous 3 sessions and finished lower week-on-week.
The power market was supported by rising carbon prices on the dayThe slide in GB gas futures was halted on Friday but near futures contracts still finished lower week-on-week. The power market was supported by rising carbon prices on the day as EU ETS unit prices for 2021 and beyond all settled above €40.00 per tonne for the first time since the market was created. Demand is expected to fall significantly as temperatures rise to above normal this week. The day ahead contract eased a little further with lower demand and good wind generation levels for today and the early part of this week are forecast.
After Thursday’s minor reversal on the oil market, crude oil resumed the upward trend of the previous 2 weeks. Brent crude gained $1.29 to settle at $62.43 a barrel, its highest settlement level since the start of the coronavirus pandemic. The U.S. benchmark, West Texas Intermediate, also finished the week at a 13-month high, gaining $1.20 to settle at $59.47 a barrel. Tightening global supply and reports of an attack by Iranian-backed Houthi rebels in Yemen on a Saudi airport helped maintain the upward trend in crude oil price.
Crude oil resumed the upward trend of the previous 2 weeks