Brent crude up overnight and touching the $70.00 a barrel mark
05 May 2021
Overall demand on the system was only slightly above normalA significant supply deficit saw the UK gas system forecast 30MCM short yesterday morning. Overall demand on the system was only slightly above normal thanks to very strong wind generation levels and despite below normal temperatures. Spot and day ahead gas prices gained 4.00p and 3.00p respectively in early trading but finished only fractionally up day-on-day as the system was balanced by close of business. Early gains of 1.00 to 2.00p on the futures market were reversed as carbon prices fell back below €50.00 per tonne.
Record high renewable generation on Tuesday saw gas-fired generation fallRecord high renewable generation on Tuesday saw gas-fired generation fall to 25% of the stack while renewables met almost 50% of demand. Wind generation topped 13GW in the morning and was supplemented by 3GW of solar. The new front month contract for June shed £0.95/MWh as gas and carbon prices eased a little but contracts further out the curve saw mixed movement. Despite yesterday’s record high renewable contribution, the day ahead contract gained £6.80/MWh as wind generation is forecast to halve today. Demand is also forecast to remain above normal as temperatures remain low.
Crude oil prices resumed their upward momentum on Tuesday with the new front month July contract for Brent gaining $2.12 to close at $68.88 a barrel. West Texas Intermediate for June delivery gained $1.22 to settle at $65.69 a barrel. Optimism surrounding increasing demand in the U.S. saw gasoline prices gain 2% to close at just over $2.50 a gallon, the highest settlement price since July 2018. The renewed optimism is fueled by more rapid vaccination roll out in Europe and the U.S. and hopes of a strong increase in road and air travel over the summer months. Carbon prices eased marginally on the day, falling below €50.00 per tonne again.
Crude oil prices resumed their upward momentum