Market volatility continued to shake markets last week as political events continued to influence prices. Sanctions on Iran and collapsing oil output in Venezuela were causes of concern as traders wait for news at the next OPEC summit on 22 June.
Saudi Arabia and Russia continue to indicate that they will lift production limits. This seems more likely after the United States put in an unofficial request to increase output and control prices.
A surprising increase in US storage levels and drilling worry the market as output continued to grow in the US. All told, Brent closed the week down 0.5% at $76.46 per barrel.
In the UK, the gas system stayed balanced, even with outages and low wind output for the last ten days increasing power station demand.
The news that the large Dutch Groningen field may shut sooner than expected had little impact on the market, but there is shorter term concern about a planned outage at the Belgian interconnector next week.
On electricity, low winds for the last two weeks have prompted more nuclear and gas generation. Wind output is forecast to increase this week. The electricity is in overall good health with solar energy contributing to the energy mix.
Last week painted a mixed picture of prices. Prompt year prices fell but 2019 and 2020 prices held steady. The price for delivery before October saw small falls as pressure eased.
Concern about gas shortages seem to be easing slightly but there is no guarantee that they will not return. With ongoing political developments, energy buyers may choose to wait and see how the market develops.