Gains across fossil fuels reverse recent power slump
Thursday 21st June 2018
Whilst June started in continued bearish mode, things have more recently picked up across gas and thus power. In spite of oil’s rise being halted by talk of an OPEC / Russia production increase, gas has gained on renewed demand for LNG from Asian markets. Short-term gas also shot up on particularly low wind generation output, with wind power going from less than 6% of the mix to over 30%. Short-term gas also eased as Hinkley B7 nuclear reactor came back online and the main Belgian interconnector closed for maintenance, trapping gas on Britain.
Coal demand in Asia has also given impetus to European power markets.
Oil is still a fundamental driver across the piece. The widely anticipated OPEC output increase has led to Brent remaining around the $75 mark (off the $80 highs), but this increase is only in response to other cuts, namely those in Iran and Venezuela, so does not constitute new oil coming to market.