Volatility continued on the power prompt where the day ahead price jumped.
14 April 2021
Weaker dollar makes oil more attractive in other currenciesCrude oil markets extended gains for the second session a row on a combination of a weaker dollar and some more optimism on future oil demand. With crude oil being priced in dollars, dollar weakness makes oil more attractive in other currencies, which in turn acts to boost prices. The latest monthly report from OPEC suggests an increase in 2021 global demand albeit by a small amount. Both factors encouraged Brent crude to trade to a high of $64.19 a barrel at one stage but by market settlement the product had moved off its high point for the day to $63.67, posting a gain of 39 cents.
GB baseload power futures recorded modest losses on Tuesday with the market giving up some of the gains from the previous session. The weakening of the power curve can be attributed to losses in both the NBP gas and EUA carbon markets. The June baseload power contract settled at £58.28/MWh, £0.62 lower than the previous day. Volatility continued on the power prompt where the day ahead price jumped by a further £13.20/MWh. A high-pressure system is expected to lodge itself over the UK in the coming days and this will almost certainly result in lower wind generation levels putting more pressure on the power system margin.
High- pressure system over UK will result in lower wind generation