The tight control on production by OPEC continues to support prices
23 June 2021
UK NBP gas market remained elevated on TuesdayThe UK NBP gas market remained elevated on Tuesday with further premium added to contracts over the course of the day. The ongoing issue at the Karsto field in Norway is adding to the negative sentiment and flows via Langeled remain relatively low. Concerns regarding LNG deliveries and replenishing storage stocks continue to provide significant support to the gas market. Demand for LNG remains especially high in Asia and this is driving up prices and attracting supplies away from Europe. The front month July contract gained by 2.41p as it closed at 74.95p per therm. The front Winter is now traded at 82.19p, up by 2.67p on the previous settlement.
Wind generation is expected to be low todayBaseload power futures in the UK continued to be driven by the gains in the NBP curve on Tuesday. the gas market opened firmer and these gains were extended during the rest of the session. The front month closed at £80.00/MWh up £1.90/MWh while the front winter contract was over a pound higher at £87.78/MWh. Forecasts for lower wind generation from later today supported the continued to drive the power prompt on Tuesday. Wind generation is expected to be low today but is expected to pick towards the weekend. The baseload product for the day ahead closed £6.50/MWh higher.
Crude oil prices moved between gains and losses over the session on Tuesday as the market struggled to find a clear direction. The Brent crude contract for August delivery traded to a high point $74.80 and fell to a low of $73.00 as crude traded in a range of $1.80. At its high point the crude oil market briefly hit a two-year high but pulled back from this quite quickly. It is clear that the prospect of recovering demand continues to provide support for prices while the lack of agreement on the Iran nuclear front remains an issue. The tight control on production by OPEC continues to be the main support for prices. At market close Brent crude finished more or less flat to the previous settlement.
Crude oil prices moved between gains and losses