Crude oil moved lower again, despite a further weakening of the dollar
21 May 2021
UK gas market turned higher on ThursdayThe UK gas market turned higher on Thursday, reclaiming some of the premium shed over the previous 3 days. Early trading on the UK gas market suggested that the rewinding of recent premium had ceased and that prices might stabilise somewhat but the upturn on the gas futures market gained momentum as the day progressed and near futures prices gained over 4.00p by close of business. Futures prices remain around 8% lower week-on-week however but the correlation between gas and carbon prices remains strong as evidenced again yesterday. Prompt gas prices recorded more modest gains as demand fell and the system maintained a supply surplus for most of the day.
GB power futures rebounded strongly on ThursdayGB power futures rebounded strongly on Thursday as carbon recovered some of the recent losses to trade above €50.00 per tonne again. Carbon prices gained over 6% with EU and UK markets moving in tandem following Wednesday’s sell-off. Baseload futures for the coming 12 months rose to average £75.00/MWh. Day ahead baseload power moved sharply lower as wind generation soared and is forecast to remain elevated today. Wind is expected to contribute 12GW today and is forecast to displace gas as the largest source in the GB generation mix today.
Crude oil moved lower again on Thursday despite a further weakening of the dollar. Reports of progress in talks between Iran and the U.S. raised the prospect of increased Iranian oil coming to the market in the event of an easing of sanctions. This, at a time when demand is only slowly recovering from the economic downturn caused by coronavirus, raises concerns of possible market over-supply. Brent crude shed $1.55 to settle at $65.11 while West Texas was down $1.92 to $61.94 a barrel. The dollar has continued to weaken amid speculation around an increase in interest rates by the Federal Reserve.
Brent crude shed $1.55 to settle at $65.11