Czech Energy Pricing Trends - 28 Jan. 2022

CO2 price (Dec-22) increased by 4,17 EUR/t WoW to level 89,76 EUR/t WoW. Today market grew above 90 level.

Brent price (Mar22) increased by 0,96 USD/bbl WoW to 89,34 USD/bbl. Today market grew above 91 level.

Coal API (Feb22) increased by 26,15 USD/t WoW to 180,15 USD/t. Today coal remained flat.

The electricity price grew quite significantly, especially Front Quarter, which especially followed gas market. Bullish remaining energy mix also supported the power market. The price also reacts to geopolitical tension on Ukrainian/Russian borders - please see gas section.

The price development does not seem to reflect real fundaments but rather risks of further escalation of the conflict.

In case of de-escalation (which we all hope for) some price correction is realistic and probable.

Slovak power market followed the trend of Czech market.

Slovenian market followed trend on other European electricity markets.

SPOT increased and was holding above 90 EUR/MWh level this week, as reaction to risk of escalation of conflict on Ukrainian/Russian border.

Gas market experienced significant price increase, especially driven by escalation of risks of conflict on Ukrainian/Russian border. In such case, significant sanctions against Russia, as well as retaliation actions from Russia, would mean significant decrease/stoppage of gas imports into Europe from east (as well as other fuels). The gas market participants price this into the current market products. In case of de-escalation of these tensions, we could expect significant easing.  Also updated weather forecast for February predicts bit lower temperatures than previous one - however, quite close to average levels. LNG imports remain high and this situation for the time being should continue in near future. Gas level in European gas storages decreased by 4,57% WoW (as of Wednesday) to level 40,22%.

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Miroslav Ceman

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