The oil market is gaining support from the accelerating roll-out of vaccines in the U.S. and Europe
20 April 2021
UK NBP recorded gains for a fourth consecutive dayGas prices at the UK NBP recorded gains for a fourth consecutive day on Monday with day ahead and near futures gaining over a penny day-on-day. Demand on the UK gas system fell to seasonal norms yesterday as temperatures increased slightly and solar power generation reached a new record high on the day. Despite a well-supplied system which opened 20MCM long and finished the day 12MCM long, spot and day ahead prices gained over a penny, as did the front month and June contracts. Following the berthing of 4 fresh cargoes since Friday, LNG send out ramped up to 80MCM yesterday and storage withdrawals fell as demand eased to around normal levels for this time of year.
GB baseload power futures saw mixed movement on MondayGB baseload power futures saw mixed movement on Monday with near contracts gaining while contracts beyond the summer months eased slightly. The front month saw by far the biggest increase, gaining £1.40/MWh on news that the Brit-Ned interconnector will not return this week but will remain off-line into May. The day ahead contract nudged higher as wind generation remains weak and the Brit-Ned inter-connector remains down. Yesterday saw a new milestone established as solar generation surpassed nuclear (during daylight hours) and, at over 6GW at peak, was over 3 times the wind contribution at that time.
Crude oil recovered Friday’s minor loss as Brent gained 28 cents to settle at $67.05 a barrel and keep the oil market in a week-long trading range above $65.00 a barrel. The U.S. benchmark, West Texas Intermediate, recorded a similar gain on the day to settle at $63.38 a barrel. A weakening dollar was the main price driver yesterday with the Greenback, which is the universal trading currency for oil, falling below $1.20 against the euro. The oil market is also gaining support from the accelerating roll-out of vaccines in the U.S. and Europe which, it is hoped, will lead to more rapid economic recovery.
Crude oil recovered Friday’s minor loss as Brent gained 28 cents