The Aug Brent Futures flat price saw a fairly muted morning in terms of price action, with much of the morning seeing trading in a range between $78.60/bbl and $78.80/bbl. It briefly touched an intraday high of $79.15/bbl at 09:00 BST but appears to have met some resistance and is hovering around the $78.70/bbl mark at 11:00 BST (time of writing). Blazing weather forecasts across the Western US and particularly in California are set to initiate a high season for natural gas demand. Forecasts into the early 40s for parts of California later this week are set to initiate a spike in demand for gas-fired power generation for cooling units earlier than expected. In an interesting turn of central bank policy, we are anticipating the ECB at 13:15 BST today to announce a 25bp interest rate cut, which is now fully priced in. This has occurred following the Bank of Canada’s decision yesterday to proceed with a 25bp rate cut, being the first of the G7 countries in this cycle to start cutting rates, with the Bank of England expected to follow suit later this month. The front and 6-month Brent spreads are $0.31/bbl and $2.14/bbl, respectively.
