Crude oil prices reaching levels not seen in almost 2 years
08 March 2021
The positive supply balance on the day saw the spot price easeWeak wind availability ensured elevated demand for gas-fired power generation again on Friday. A rise in temperatures brought overall gas demand down from the high levels seen earlier in the week and the system was comfortably supplied on the day. Despite the well-supplied gas system and good supply outlook with strong LNG deliveries expected for the remainder of this month, futures contracts at the NBP for the next 12 months recorded gains averaging 1.35p. The positive supply balance on the day saw the spot price ease by 0.60p and the day ahead contract fell marginally but the week ahead contract for this week was up by 0.75p.
Baseload power futures gained significantly on Friday as gas, crude oil and carbon prices all strengthened on the day. The front month gained £1.25 to £52.50/MWh while the Summer 21 contract topped £50.00 and Winter 21 moved above £60.00/MWh. EU carbon allowances finished in a range between €39.00 and €40.00 per tonne. A forecast pick-up in wind generation for today offset rising fuel and carbon prices to press the day ahead power price lower. Demand is also forecast to ease with temperatures at more normal levels for this time of year.
Baseload power futures gained significantly
The outcome of the OPEC+ meeting on Thursday, maintaining current production quotas for all except Russia and Kazakhstan, was greeted bullishly by the market on Friday. Crude oil prices surged for a second consecutive day, reaching levels not seen in almost 2 years. Brent crude gained $2.62 and was up $6.66 a barrel in 3 days. The U.S. benchmark, West Texas Intermediate, was up by 7.5% week-on-week to settle at $66.07 a barrel. EU carbon allowances gained for a third consecutive day to end the week in a range between €39.00 and €40.00 per tonne.
EU carbon allowances gained for a third consecutive day