The oil market saw a third day of modest losses
17 March 2021
Prompt prices retained early lossesWith demand on the UK gas system running below 250MCM for most of the trading day, the system opened with a surplus of 24MCM and retained a surplus to close of business yesterday. Above normal temperatures and lower power demand saw overall gas demand reduced and strong LNG send-out comforted the market on the day. Prompt prices retained early losses with all contracts closing below 45.00p again. On the futures market, prices for the coming 12 months were down by an average of a penny as LNG supply is forecast to pick-up over the summer months.
GB baseload power futures fell lower in line with further easing of gas, crude oil and EU ETS carbon allowances on Tuesday. The front month contract shed £1.30/MWh to settle at £55.10 and might have fallen further but for news that the maintenance outage on the Brit-Ned inter-connector has been extended from 22 April until 8 May.
GB baseload power futures fell lower
Carbon prices eased againThe oil market saw a third day of modest losses as investors fear a sluggish recovery in demand in Europe and the U.S. as immunisation against Covid continues at a slower rate than anticipated. Brent crude shed a further 50 cents to settle at $68.39 a barrel while carbon prices also eased again with EU ETS unit prices shedding 80 cent per tonne. West Texas Intermediate fell by 90 cents to settle at $64.80 a barrel, its first settlement below $65.00 in almost a week. The market will today focus on the weekly U.S. inventory data release for any signs of a pick-up in demand.
Trading on the UK gas market has been particularly slow to get started today with no trades or even bid-offer spreads showing on the prompt. Futures contracts traded so far show a continuation if the downward trend of the week so far with the front month down by 0.55p. Demand on the UK gas system has picked up on yesterday’s level as wind generation has halved overnight. Overall demand remains some 20MCM below the seasonal norm however and the system is forecast 5MCM long for the day. Oil prices continue to ease with Brent down another 30 cents overnight while carbon prices have recovered a little in early trading this morning.
Oil prices continue to ease overnight