Crude oil prices slipped back from the 2-year highs
10 June 2021
Demand on the UK gas system hit a new year-to-date lowThe Norwegian system summer maintenance programme ramped up to cause maximum disruption to UK gas supply with deliveries via the Langeled line falling to 20MCM on Wednesday. While demand on the UK gas system hit a new year-to-date low, and the system retained an average supply surplus of 8MCM through the day, spot and day ahead prices gained 1.30p and 1.15p respectively. The market remains concerned that rising temperatures will lead to increased power demand for air-conditioning, adding to gas demand when storage injection should be the priority. Near futures contracts gained over 1.50p as concerns remain over low storage levels and supply-demand balance over the summer months.
Pressure on the power futures market is set to continueGB baseload power futures moved higher in line with gas prices on Wednesday with near futures averaging gains of almost £1.00/MWh. Pressure on the power futures market is set to continue as gas injection rates ramp up and Norwegian gas deliveries are restricted by summer maintenance programmes. The day ahead price gained marginally as renewable power was forecast to increase day-on-day. Wind generation is expected to rise to 5GW today and solar generation is forecast to reach new record highs over the coming days.
Crude oil prices slipped back from the 2-year highs seen on Tuesday as U.S. demand was lower than expected and talks between Iran and the U.S. stalled. Weekly inventory data from the Energy Information Administration on Wednesday showed a fall-off in U.S. distillate demand last week when the “driving season” usually commences and demand surges. The market is keenly focused on demand on countries where vaccine roll-out is facilitating the revival of economic activity leading to increased oil demand. Brent crude shed 37 cents to settle at $71.85 a barrel, which is just 50 cents higher over the past 5 days but the global benchmark appears to have established a new platform above $70.00.
Global benchmark appears to have established a new platform above $70.00