Pricewatch | 09 Feb 2021 | Gas Matters Today

Oil prices settled at their highest since January 2020 on Monday, with the front-month Brent crude contract closing 2.1% higher to settle at USD 60.56/barrel. The Brent price has rallied by over USD 4/barrel since the start of the month and over USD 9/barrel since the start of the year. As for the front-month WTI price, it also settled over USD 1/barrel higher to start the week, pushing into the USD 57/barrel range. The WTI price is also up by over USD 4/barrel since the start of February, with the price having rallied by over USD 10/barrel since the start of January.

The oil price bull run is due to both supply and demand side factors. The production cuts initiated by Saudi Arabia and OPEC+ are reducing supply, with signs of improving demand in China and India. Optimism regarding the rollout of Covid-19 vaccines and the expectation of a major stimulus package in the US – both expected to bolster oil demand – are also aiding the oil price rally.

Gas prices mirrored crude, with gains seen on both sides of the Atlantic. European gas prices surged on Monday amid a cold snap gripping the region, with a strong carbon price also supporting gas-fired power generation. The front-month UK NBP price settled 10.4% higher, and the month-ahead Dutch TTF price increased by 9.9% to settle at the equivalent of USD 7.12/MMBtu.

CME’s JKM futures contract recorded a marginal gain, closing 0.5% higher at USD 8.43/MMBtu.

The European carbon price hit a record high after rallying by 1.1% on Monday to settle at EUR 38.56/tonne.

Front-month futures and indexes at last close with day-on-day changes (click to enlarge):

​Time references based on London GMT. Brent, WTI, NBP, TTF and EU CO2 data from ICE. Henry Hub, JKM and API2 data from CME. Prices in USD/MMBtu based on exchange rates at last market close. All monetary values rounded to nearest whole cent/penny. Text and graphic copyright © Gas Strategies, all rights reserved.