The oil market has turned bullish again with Brent crude up
22 February 2021
Demand on the UK gas system fell furtherGas prices at the NBP relinquished most of Thursday’s gains on Friday which was enough to see the market finish lower for a third consecutive week. As demand on the UK gas system fell further with rising temperatures, gas prices shed premium across the board on the day. For the first time last week, the system ran in deficit for most of the trading day. Despite this, prompt gas prices fell by an average of 1.75p with the day ahead down by 2.30p and week ahead for this week shedding 1.70p. The front month settled 1.94p down at 42.10p while Q2 ended the week at 40.00p.
Thursday’s lift in power prices proved temporary as the recent downturn resumed on Friday with day ahead and front month prices easing by £0.85/MWh. The downturn has generally followed falling gas prices but has been further facilitated by falling carbon prices which relinquished almost a euro per tonne on Friday. The week ahead contract for this week was unchanged despite lower wind forecast. Wind generation averaged around 10GW throughout last week but is expected to average only half that level this week.
The downturn has generally followed falling gas prices
Despite a further weakening of the dollar on Friday, crude oil prices eased for a second consecutive session on Friday leaving Brent crude just 48 cents higher week-on-week. Speculation is growing that OPEC and Russia are likely to increase production quotas for Quarter 2 but with the recovery in economic activity still uncertain, prices will likely remain rangebound for the moment. Brent crude settled at $62.91, down $1.02 a barrel while the U.S. benchmark, West Texas Intermediate declined by $1.28 to $59.24 a barrel.
Crude oil prices eased for a second consecutive session