Oil market responded to several bearish developments yesterday
18 March 2021
Slow start to trading saw prompt prices opening marginally up on Tuesday’s closing levelsAs wind generation fell-off yesterday, gas demand rose and the supply side was slow to respond, leaving the system 10MCM short at close of business. The slow start to trading saw prompt prices opening marginally up on Tuesday’s closing levels but as demand increased and the system fell short, prices increased to finish 1.80p higher on average. The front month gained 1.12p and the full summer contract was up 0.69p but movement on contracts further out the curve was marginal. Crude oil settled 40 cents lower at $68.00 a barrel but carbon prices rebounded strongly from a recent decline to hit new record highs on Wednesday.
GB baseload power futures gained for the first time this week as gas and carbon prices strengthened yesterday. The front month contract gained £0.70/MWh as indeed did the full Summer 21 contract. Gains were recorded right along the curve as carbon prices rebounded strongly on the day.
GB baseload power futures gained for the first time this week
The oil market responded to a number of bearish developments yesterday to ease for a fourth consecutive session, cancelling out the strong gains of last week. Brent crude shed 39 cents to settle at $68.00 a barrel, 20 cents down on last week’s Wednesday close. The market was responding to an IEA report which forecast a slower recovery in demand this year than previously predicted. This was reportedly due to slower vaccination roll-out in Europe and the U.S. and reduced Chinese demand as storage facilities there reach capacity. West Texas fell by 30 cents to $64.60 a barrel as weekly inventory data showed both crude and distillate stocks increased last week, indicating weak demand.
West Texas fell by 30 cents to $64.60 a barrel