Oil price drops – DMR

The price of oil has fallen, according to npower’s daily market report. Brent retreated from $65 a barrel (£41/Bbl) on Friday and is currently trading below $63 a barrel (£40/Bbl). […]

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

Brent retreated from $65 a barrel (£41/Bbl) on Friday and is currently trading below $63 a barrel (£40/Bbl).

Ben Spry from npower’s optimisation desk said: “Domestic US oil production is continuing to post impressive numbers at just under 10m barrels day.

“We have also seen reports this morning that 10m barrels are held in floating storage off Nigeria.

“This could provide some selling pressure in coming months. Production is also increasing in Iran and Libya which should add further weight.”

 

The gas system is currently 20mcm oversupplied.

The Dutch Balgzand Bacton Line (BBL) is nominated at 17mcm today although it is currently flowing higher.

Langeled [Norwegian] flows are also higher than last week at 16mcm.

LNG send out has dropped. Mr Spry added: “Storage balances remain relatively empty but two confirmed tankers are due to arrive this week so we could expect to see some movement as July approaches.”

Power margins are more comfortable than last week. Gas-fired generation is still dominant, which has resulted in CCGT demand of 35mcm.

Wind generation is expected to peak at 3GW today although current output is currently falling short of forecasts.

Imports from the continent continue to be at full capacity, which is helping to ensure a comfortable peak margin of more than 14GW.