The recent rally on the oil market showed no sign of reversing
16 February 2021
Prompt and near futures gas prices at the NBP fell sharply againTemperatures recovered substantially quelling heating demand across the UK and Ireland on Monday. Prompt and near futures gas prices at the NBP fell sharply again as demand moved below 300MCM with the rapidly rising temperatures. Although well below Friday’s near record highs, wind generation also helped relieve gas demand on the day. The system was comfortably supplied for most of the trading day and prompt gas prices fell by an average of 3.60p. The front month relinquished another 3.27p premium to finish almost 22% lower week-on-week. Losses along the curve averaged 1.25p with the front winter settling below 50.00p for the first time in 4 weeks.
GB power futures tracked gas contracts lower on Monday as carbon prices also easedGB power futures tracked gas contracts lower on Monday as carbon prices also eased, removing the support seen on Friday. The front month contract shed £2.15/MWh and is down by 13% week-on-week. The recent surge in carbon prices was halted as EU ETS unit prices fell by 45 to 50 cents to settle just under €40.00 per tonne. The day ahead contract moved counter to the gas market, gaining almost £3.00/MWh. The gain is somewhat surprising given falling demand and a forecast for stronger wind availability today. The week ahead contract shed £6.50/MWh with mild weather expected for the end of the month.
The recent rally on the oil market showed no sign of reversing as Brent crude gained a further 83 cents to settle at $63.30 while West Texas was up 65 cents to $60.12 a barrel. The U.S. benchmark has topped the $60.00 mark for the first time in over a year and Brent crude is also trading at a 13-month high on optimism for economic re-opening as Covid-19 vaccination programmes are rolled out in most major economies. The cautious approach of OPEC and other major producers to increasing production levels has helped the steady recovery in oil prices. At over $60.00 a barrel however, many U.S. shale plays which have been shut down over the past 12 months, may now come back into production.
Brent crude is trading at a 13-month high