Strengthening fuel prices provided support to the GB power market
15 April 2021
Prompt gas prices saw mixed movement on the dayAs temperatures in Britain rose to near seasonal norms on Wednesday, demand on the UK gas system remained below 275MCM and the system was forecast long for most of the trading day. Gas-fired power demand was again strong as wind generation remained below 2GW but heating demand declined with rising temperatures. Norwegian deliveries via Langeled were back to near maximum levels while LNG send-out remained robust. Prompt gas prices saw mixed movement on the day with day ahead up by 0.70p and week ahead down by 0.45p. Futures contracts recorded marginal gains right along the curve with support from a bounce on the oil market yesterday.
Supply-demand remained finely balancedStrengthening fuel prices provided support to the GB power market on Wednesday as futures contracts reversed Tuesday’s losses. As was the case on Tuesday, the June contract was the biggest mover, adding £0.85 to settle at £59.25/MWh. Elsewhere on the curve, gains were less than £0.50/MWh. Carbon price movement was negligible on the day. The day ahead baseload power contract shed £18.00/MWh as the recent tightness on the GB power grid eased. Supply-demand remained finely balanced however and a modest increase in forecast wind generation for today was not enough to pull the day ahead back to more normal levels.
Crude oil broke out of its recent rangebound trading pattern as weekly inventory data from the U.S. showed demand on the increase. Oil stocks declined by 6 million barrels last week and gasoline demand increased to an 8-month high of 8.9 million barrels per day. The data also revealed that refining activity in the States was at a 13-month high, reaching 85% of total refining capacity last week. The U.S. benchmark, West Texas Intermediate, was up almost 5% to settle at a 4-week high of $63.15 a barrel while Brent crude gained almost $3.00 to settle at $66.58, its highest settlement price in 4 weeks.
Oil stocks declined by 6 million barrels last week