Crude oil maintained its recent strength
16 June 2021
UK gas prices remain elevatedThe UK NBP gas market opened lower on Tuesday and prices eased further over the course of the session. While the downward movement was a welcome development, UK gas prices remain elevated and much of the premium added in recent days remains. The front month July contract fell to a low of 68.59p before settling at 68.87p, down by 1.36p from the previous session. Other near term delivering contracts shed similar amounts with Winter 2021 declining by 1.73p to 76.25p per therm. UK forecast gas demand increased to 118MCM and the system ran with a modest surplus of 7MCM throughout the day.
As the broader energy complex turned weaker so too did the GB baseload power marketAs the broader energy complex turned weaker so too did the GB baseload power market and contracts went lower across the board. With natural gas and carbon shedding premium it was inevitable that pressure would come on the power curve. The front month July baseload contract shed £1.78 to close at £75.87/MWh. Likewise, the Winter 2021 contract moved lower by £1.65 to close at £83.60/MWh. The day ahead baseload power market was less predictable as contracts moved between gains and losses over the day. At settlement the market finished flat at £77.50/MWh.
Crude oil maintained its recent strength and edged higher once again during the market on Tuesday. Crude has now extended gains for the fourth session in a row with the product consolidating its position above the $70 a barrel mark. Clearly, the recent announcement by the International Energy Agency that oil demand could return to the pre-pandemic levels by the end of 2022 is impacting. The market has been buoyed in recent weeks with the prospect of increased economic activity and as a consequence a return to higher global demand levels. At market settlement the Brent crude contract was priced at $73.65 a barrel, up by 79 cents from the previous close.
The market has been buoyed in recent weeks