Crude oil has hit a new 2-year high
14 June 2021
UK gas system was more comfortably supplied on FridayThe UK gas system was more comfortably supplied on Friday as increased Norwegian deliveries and lower export demand saw the system running an average of 10MCM long with overall demand running some 40MCM below the seasonal norm. The spot gas price at the UK NBP stepped lower by almost 10% day-on-day while remaining prompt prices also eased as it appears that the peak of Norwegian summer maintenance programme has passed. Thursday’s news that the Nord-Stream 2 pipeline has commenced pre-commissioning saw near futures prices ease significantly on Friday. The front month shed 2.68p while seasonal contracts out to W 23 shed an average of 1.38p.
GB baseload power futures prices declined in line with falling gas and carbon prices on Friday with the front month shedding £2.60/MWh. Gains were recorded right along the curve with seasonal contracts up by an average of £1.36/MWh. The price decline came despite an increase of over €1.00 per tonne in EU ETS unit prices on the day. The day ahead baseload power price moved in the opposite direction to the gas price, gaining £6.00 on forecast increased demand for today. The movement on the day-ahead power market was difficult to reconcile with falling gas and carbon prices on the day.
Gains were recorded right along the curve
Crude oil edged higher on Friday with Brent gaining 17 cents to settle at a new 2-year high of $72.69 and up by 80 cents week-on-week. The market remains bullish as developed economies are showing increased appetite for oil products with increased economic activity. The monthly OPEC report predicts increased demand on foot of strong vaccine roll-out in developed economies where economic stimulus measures and pent-up demand is likely to see strong demand growth in Q3 and Q4 2021. The U.S. benchmark, West Texas Intermediate, gained 50 cents to settle above $70.00 a barrel for a second consecutive day.
Crude oil edged higher on Friday