Gas market continues to respond to higher crude prices
12 March 2021
Modest losses were soon erased as prices ticked up across the boardThe upward trajectory on the UK NBP gas market continued on Thursday as contracts finished above the previous settlement. At an early stage there was some prospect of some downward correction as the market was softer on opening. These modest losses were soon erased as prices ticked up across the board. Clearly the crude oil market is one of the factors driving premium into future contracts and gains for Brent crude continued on the day. While the Euro/£stg exchange rate remained more or less stable on the day, sterling recent strength is also a factor. At market close the front month added a further 1.69p while the front Summer was up by 1.61p.
Wind generation in the GB power market peaked at 10.4GW yesterday as weather conditions turned favourable. As a consequence, CCGT generation declined to provide only 30% of the stack. The BritNed interconnector remains offline but nevertheless 3.8GW of power was coming through the other interconnectors. On the markets baseload power contracts moved in tandem with the broader energy complex. Strong gains on gas, carbon EUAs and crude oil saw premium flow into baseload power contracts. Across the forward curve gains averaged £0.81/MWh.
The BritNed interconnector remains offline
The bull run in the crude oil market continued on Thursday as the market continued to respond to the prospect of increasing demand as the covid 19 vaccine was rolled out across the globe. In addition, the passing of the Biden Administration’s stimulus package gave a boost to markets in anticipation of improving economic activity in the world’s largest economy. The U.S. Congress gave its final approval to the $1.9 trillion dollar relief package which will put more spending power directly into U.S. households. At market settlement the Brent crude contract was up by $1.73 at $69.63 while WTI was trading 1.5% higher.
The bull run in the crude oil market continued