Brent closed at the highest level since the end of October 2018
25 June 2021
Prompt and near curve gas prices on the NBP continued upwardPrompt and near curve gas prices on the NBP continued upward on Thursday as concerns of tight supply remains the main driver. UK storage facilities usually restock during the summer months but yesterday, reserves from the Stublach site were employed to balance the GB gas system. However, the outlook for the next few days is to improve with the outage at Karsto being resolved, this should allow an extra 13MCM of Norwegian supply to be imported. Meanwhile wind generation is forecast to increase output from today and should ease gas demand in the short term. Over 33% of yesterday’s gas demand was used for power generation.
Sharp increases in the front of the NBP futures curve provided most of the support to baseload power prices on Thursday. Carbon EAUs rose by 1.0% or 59 cent per tonne on average and this added to the gains in power prices yesterday. The front month, July settled £1.50/MWh up at £83.75 while the winter contract settled £0.77/MWh higher. Wind generation is forecast to rise from around 3.0GW to over 4.5GW on Friday and improve into the weekend. This countered support from the NBP prompt and baseload for the day ahead eased marginally on the day, settling at £83.29/MWh.
Carbon EAUs rose by 1.0% or 59 cent per tonne on average
Brent added 37 cents a barrel on Thursday racking up nine days of gains out of the last eleven and closing at the highest level since the end of October 2018. This week’s inventory report on U.S. crude oil stocks showed a significant decrease in reserves, down by 7.6m barrels to 459m barrels. Gasoline and distillate stocks were also reduced pointing at a recovery in demand as typically the U.S. summer driving season would increase demand. OPEC are due to meet next week and while they are due to increase output by 840,000 barrels per day from 01 July, there is some pressure on the group to release more crude oil into the market.
Brent added 37 cents a barrel on Thursday