Brent settles above $70.00 a barrel for the first time in 2 years
02 June 2021
Gas demand fell 30MCM below the seasonal normWith summer temperatures arriving over the weekend, gas demand fell 30MCM below the seasonal norm on Tuesday and the UK gas system ran supply surplus throughout the trading day. LNG send-out remained strong, averaging 50MCM, or one third of total demand on the day. Gas prices recovered most of the losses seen at the tail end of last week with prompt gas prices gaining an average of a penny, despite the comfortable supply-demand situation. Prices for the coming 12 months were up by an average of almost 3.00p but seasonal contracts beyond the front winter recorded gains of less than a penny on the day.
Baseload power prices resumed the recent rallyBaseload power prices resumed the recent rally after the long weekend in the UK as gas and carbon prices turned higher again. The new front month contract for July gained £1.35 to top £75.00/MWh. The front winter contract gained £1.90 to settle at £82.50/MWh. Carbon prices recovered Friday’s slippage to finish in a range between €51.76 and €53.26 per tonne. The day ahead baseload contract fell by £2.00/MWh with low demand and higher wind generation forecast for today. The week ahead contract finished up by £1.50/MWh however as wind forecasts for later this week and next were revise downwards.
Crude oil prices strengthened on Tuesday with Brent settling above $70.00 a barrel for the first time in 2 years. The renewed strength in the oil market is mainly down to rebounding economic activity due to vaccine rollout in Europe and the U.S. The U.S. recorded its lowest unemployment figures since before the pandemic last week and confidence is returning to all major economies except India. The prospect of the lifting of sanctions on Iran still hangs over the market and could knock prices back below $70.00 if significant amounts of Iranian crude come back onto the market.
Crude oil prices strengthened on Tuesday