Oil price spike muted by strong LNG supply outlook
Mixed movement was observed on day ahead gas prices on Friday as strong LNG supply seemingly muted a bullish wider energy complex.
Plentiful LNG send-out likely reduced day ahead prices where most contracts continued to shed value. The latest shipping signals indicate that 4 laden vessels are scheduled to berth at British terminals over the next two weeks. Data from the Port of Milford Haven shows that the Paris Knutsen is due to offload Peruvian volumes at the Dragon No1 terminal early this evening.
Contracts further out increased as the oil market jumped. ICE data shows that the Brent Crude benchmark contract posted upside of over $3/barrel on Friday, it’s largest day-on-day increase since 13th October.
In other news, the BBL company announced they will be increasing flows to 90% through their UK-Netherlands interconnector starting from April 2024 and lasting six months. The 7 million kWh/h capacity connector only sees extensive use during summer months with intermittent flows over the winter period.
This morning, gas prices have opened in bullish territory, with the Summer-24 front-season contract last trading circa 0.1p/kwh above its previous settlement at time of writing.
If we check the latest half hourly period at the time of writing (11:00 – 11.30), 38.00% (14.49 GW’s) of the UK’s total electricity (37.22 GW’s) is being generated from gas at the moment with wind turbines contributing 9.95 GW’s (26.09%) of the total generation mix.
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