West Texas settling at its highest in 2 years
18 May 2021
Prompt gas prices eased significantlyDemand on the UK gas system was some 30MCM above the seasonal norm yesterday as temperatures remained below normal and wind generation was subdued. A big increase in storage injection rates, following weeks of withdrawals, also added to the overall demand but an early system deficit was recovered as LNG deliveries ramped up in the afternoon and the gas system finished with a surplus of 5MCM. Prompt gas prices eased significantly as wind generation began to pick up with spot and day ahead prices shedding 1.10p while the week ahead was down by 2.90p. The front month and Q3 contracts shed around 1.50p as carbon prices recorded some modest losses on Monday.
GB power futures eased for the first time in over a week as carbon and gas prices easedGB power futures eased for the first time in over a week as carbon and gas prices eased and the supply outlook was improved. The front month contract shed £1.35 and Winter 21 was down by £1.70/MWh as the supply outlook improved with the French and Dutch inter-connectors coming back to full service this week. The day ahead baseload price gained £1.50/MWh as renewable generation is forecast to fall off again today. Wind generation was forecast to strengthen today but this has now been reversed and wind is contributing less than 1GW. Below normal temperatures are forecast for the remainder of the week.
Crude oil prices moved higher again on Monday with Brent edging closer to $70.00 a barrel and West Texas settling at its highest in 2 years. The global benchmark gained 75 cents to settle at $69.46 while WTI was up 90 cents to $66.27 a barrel. The move higher comes on the back of increasing optimism regarding economic recovery and increased oil demand as a result of Covid vaccination roll-out in the U.S. and Europe. While the Covid situation in India continues to stymie demand in the world’s third largest oil consuming nation, renewed economic growth in China is helping to redress the global demand deficit.
Crude oil prices moved higher again on Monday