Oil above $50 a barrel for first time this year – DMR

Brent oil is trading at $50.16/bbl (£34.1/bbl) for the first time in 2016. Sam Hill from the Optimisation Desk said: “This has been driven by falling US stockpiles, accelerating the […]

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By Jacqueline Echevarria

Brent oil is trading at $50.16/bbl (£34.1/bbl) for the first time in 2016.

Sam Hill from the Optimisation Desk said: “This has been driven by falling US stockpiles, accelerating the rebound from the 12-year lows.

“With plenty of inventories still kicking about however, oil will continue to have a turbulent time above the $50 (£34) mark, with security of supply issues in Nigeria and Venezuela providing any further upside.”

This has increased UK gas and power prices compared to last night’s close.

The gas system is forecast to close 9mcm short due to an increase in exports through the UK Interconnector which are at 40mcm.

 

LNG send-out from South Hook is “consistent” with nominations throughout the week at 36mcm.

The Rough storage is nominating more than 16mcm and flows from Norway through the Langeled pipeline are at 30mcm.

Mr Hill added: “Revisions to temperature forecast now see them tracking above, although closer to, seasonal normal levels into June, potentially dipping below. Gas demand is reasonably high for this time of year and this is expected to drop off towards the end of May.”

On the power system, the peak margin is below 14GW despite a drop in wind generation which is at 850MW.

The French interconnector is importing at 75% of its capacity and gas-fired power generation is providing 55% of the energy mix.

The pound is valued at €1.31.