Thursday 6 August 2015

Oil price drops further – DMR

The price of oil has fallen further, according to npower's daily market report.

It is currently trading at around $49.5 a barrel (£32/Bbl) compared to $50.5 (£33/Bbl) a barrel yesterday morning.

Tim Carter from npower’s optimisation desk said the "slump" happened yesterday afternoon following official Energy Information Administration (EIA) data on US inventory stocks.

The gas system is oversupplied.

The linepack is forecast to close 5mcm long as “overall demand has picked up to 167mcm [which is] 17mcm higher than the seasonal normal levels experienced at the start of the week”, Mr Carter added.

He went on: “Contributing to increased demand is an expectation of high CCGT demand as wind generation continues to tail off, currently generating 1.5GW but set to dip below 0.5GW by tomorrow.”

[youtube url="https://www.youtube.com/watch?v=y7EfRAQJu4c" width="575" height="323"]

 

Elsewhere the UK Interconnector exports have picked up to more than 32mcm. Storage injections are flat but as expected LNG send-out has picked up to more than 30mcm.

There has also been a decrease in Langeled flows ahead of the Troll [gas field] maintenance tomorrow. This might “offer support today as there is a widespread expectation of a much tighter fundamental balance”, Mr Carter said.

Peak margins are forecast to be around 10GW with CCGT continuing to dominate the stack with "nearly the same amount of generation as coal and nuclear combined".

Peak margins in France are also a bit tighter this morning under 4.5GW, meaning the French interconnector is only importing at 50% capacity to the UK.

A pound is still equal to €1.43.