Prices were once again stable with the Brent contract finishing flat to the previous session

09 April 2021

 On the prompt prices firmed

The supply/demand balance on the UK gas system turned positive on Thursday and the system ran with a surplus of 19 MCM.  Forecast demand for the day fell to 248MCM as temperature rose and an increase in wind generation displaced a significant tranche of gas-fired power generation.  The supply side was also boosted by the imminent arrival of 3 LNG tankers which were due to dock in the UK in coming days.  On the markets the improving supply position put some pressure on prices with future contracts going lower.  On the prompt prices firmed with the spot and day ahead adding 0.75p and 1.50p respectively.

The GB power futures market eased yesterday as fuel input costs declined

The GB power futures market eased yesterday as fuel input costs declined.  With the NBP gas and EUA carbon market moving lower pressure came on the front of the baseload power curve.  Prices for front month baseload fell by £0.50 and this contract closed at £56.90/MWh.  Across the remainder of the curve contracts moved lower by an average of £0.44/MWh.   The day ahead baseload contract firmed on a drop in outlook for wind generation. Wind out turned at 9.8GW yesterday but is expected to fall back to 5GW today.  The day ahead contract added £2.00 to close at £64.30/MWh.  

Sentiment is being driven by increasing European lockdowns

The crude oil market once again turned its focus for the prospect for global demand during trading on Thursday.  How demand shapes up through the Spring and high demand Summer months will largely determine the prospect for prices moving back toward the €70 a barrel level.  Sentiment is being driven by increasing European lockdowns as many countries experience a surge in Covid 19 infections.  Demand forecasts in the U.S remain bullish but the overall demand figures is being suppressed by issues elsewhere across the globe.  On the markets, prices were once again stable with the Brent contract finishing flat to the previous session.

 Gas prompt prices have edged up by a further 0.50p in anticipation of this higher demand

Demand on the UK gas system has increased by almost 10MCM overnight as temperatures begin to go lower once again and wind generation output falls.  The system is operating with a small surplus of 9MCM as send out from LNG sources increases.  With temperature expected to dip further over the weekend, demand is expected to ramp up significantly.  Gas prompt prices have edged up by a further 0.50p in anticipation of this higher demand.  On the gas curve the market has broken a two-session losing streak as prices firm this morning.  Both the prompt and gas futures markets are up by 0.50p.  Crude oil markets are easing with Brent priced at $62.85 a barrel.