Czech Energy Pricing Trends - 12 Feb. 2021

CO2 price (Dec-21) increased by 1,49 EUR/t WoW to level 38,76 EUR/t. This week price briefly attacked and exceeded 40,00 EUR/t level! Brent price (Apr21) increased by 1,3 USD/bbl WoW to 61,14 USD/bbl but today price easened a bit and is trading below 61,00 level. Coal API (Mar21) increased by 2,25 USD/t WoW to 67,75 USD/t. This week electricity market was affected especially by weather (Front month) and CO2 market (far curve products). The highest levels were reached on Monday following very cold weather forecast which drove the whole energy mix higher. CO2 market continued in bullish trend and remain very volatile with a lot of speculative buying. Some EU voices suggested some regulation regarding CO2 speculative buying and speculative short-term bets on higher prices. This follows famous Gamestop mania where group of small investors managed to drive an individual stock price to very high levels for short period of time. Similar situation would have of course much worse consequences for the electricity as well as general energy market. Some Reddit investors already pointed out to CO2 market…

Near-curve market was significantly affected by revision of weather forecasts on Monday (colder weather) however later weather was revised again upward. Some price relief comes from LNG where more imports are expected into Europe. This is also visible in German/Czech gas spread where German gas market (NCG) went below Czech one (which was standard in past however not in last couple months). This implies higher import volumes into western Europe making some western gas markets (again) cheaper than Czech/Slovak gas markets. According to today´s updated weather outlook, colder than normal conditions in some parts of Europe could last until April. The new outlook also lowered temperatures in March.

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Miroslav Ceman

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