Crude oil prices eased on Friday with pressure from a strong dollar

Gas Market

NBP futures ended the week with near contracts declining by just over a penny on Friday while longer curve contracts posted more modest losses. The front month settled below the 80.00p per therm mark for the first time in almost two weeks as demand remained subdued while supplies are healthy with European gas storage reserves above75.0% of capacity. The Chevron LNG plant at Wheatstone was expected to return to full capacity over the weekend after an unplanned outage shut the plant down over two-weeks ago but the market was still awaiting confirmation by the close of play on Friday. The Front month settled at 79.15p which was a decline of 1.24p for the day while over the week the contract shed 4.14p, however the winter-2024 contract was only down 1.14p for the week.  

Power Market

Weaker gas and carbon prices weighed on the GB baseload curve on Friday. The front month, July, settled £0.38/MWh down at £71.88/MWh while further out the Winter-2024 contract was almost £1.00/MWh lower and closed at £87.68/MWh. Carbon EUA contracts out to 2026 declined by over an average of €1.11 per tonne or 1.5% with the Dec-24 contract closing at €68.12. Wind generation is expected to remain below the seasonal norms on Monday but should increase off the low levels seen on Friday which pressured the prompt.  Forecast levels are for between 3.0GW and 4.0GW on Monday with Solar also expected to rise. Baseload load for the day ahead for Monday yielded almost £3.00/MWh. 

Oil Market

The crude oil markets eased on Friday with pressure from a strong dollar and mixed demand data from a macro level although prices finished higher for a second week. Prices were buoyed earlier in the week after the Energy Information Administration reported a fall of 2.5m barrel in U.S. crude oil stocks which hinted at a recovery in demand.  The greenback increased against a basket of currencies on Friday, a stronger dollar makes dollar traded commodities more expensive to foreign currency holders. Increased refinery activity in India for May was countered by reports that demand fell in the eurozone while geopolitical tensions are also adding to the mix. The August contract for Brent fell by 47 cents barrel on Friday but was $2.62 a barrel up for the week.

Markets this morning

Confirmation of the return of Chevron’s Wheatstone LNG plant has not impacted gas prices this morning as the near NBP curve is trading sideways. July hit a high of 79.71p per therm earlier and the latest trade has gone though at 79.56p. Contracts further out are showing minor losses so far this morning with the Winter-2024 down 0.46p. UK gas demand is forecast to rise from tomorrow on lower wind levels and increased cooling demand which has added support to the Day ahead in early trading. In the crude oil markets, front month Brent has added 0.21 cents to Friday’s close, but remains below last week’s high of $85.71 a barrel at $85.44.