Five-day run of gains on the oil market came to a halt
18 June 2021
An early supply surplus on the UK gas system was reversedAn early supply surplus on the UK gas system was reversed and the gas system fell short from midday to close of business. Demand increased as renewable power generation levels fell to just 2.5MCM and gas-fired generation was called on to supplement power demand. Prompt gas prices gained an average of 1.70p as a result of the system tightness. Futures contracts reversed Wednesday’s losses as concern for LNG supply over the summer period increased. Asian demand for LNG is increasing with China now equaling Japan in terms of imports. An added factor for UK prices is that some Western European markets are at a premium to the NBP and attracting cargoes away from the UK.
GB baseload power futures saw fractional gains on the remaining summer monthsGB baseload power futures saw fractional gains on the remaining summer months, but the front winter fell by £0.40/MWh on Thursday. Losses modest on the day but the cumulative effect over the past 5 sessions has been a more significant decline in prices. EUA’s fell by an average of just 14 cent per tonne on the day. The day ahead baseload price shed £8.50/MWh as wind generation levels were forecast to pick up significantly today. Wind is forecast to top 5GW today, up from just 1.5GW on Thursday.
A five-day run of gains on the oil market came to a halt on Thursday as Brent crude shed $1.31 to settle at $73.08 a barrel. West Texas saw similar decline on the day as the dollar strengthened considerably on speculation around an early rise in U.S. interest rates. The weekly jobless data from the U.S. showed an increase in jobless numbers for the first time since April and this also had a negative impact on oil prices. Market optimism for demand increase has been growing with the roll-out of vaccines and lifting of restrictions in Europe and the U.S. but there is also growing concern over possible production increases if OPEC increases quotas or Iranian sanctions are lifted.
A five-day run of gains on the oil market came to a halt on Thursday