Czech Energy Pricing Trends - 29 July 2021

CO2 price (Dec-21) increased by 1,7 EUR/t WoW to level 53,84 EUR/t WoW. Today CO2 market is trading around 54 EUR/MWh level.  Brent price (Sep21) increased by 2,51 USD/bbl WoW to 74,74 USD/bbl. Brent price is trading today above 75,00 level.

Coal API (Aug21) increased by 5,7 USD/t WoW to 138,6 USD/t and today is trading above to 139,00 level.

The energy mix (coal, gas and oil) had bullish development last week and especially coal continued  strengthening without any correction.

Oil price has recovered from lows on 17th July when it fell below 70 USD/bbl as reaction to OPEC agreement about quotas increase for coming months. CO2 market traded sideways, with no significant direction. The main driver for CO2 as well as electricity was gas, which increased significantly WoW - more information in gas section.  Relative stability in near curve market (compared to far curve) can be attributed to higher renewables production (especially wind in Germany).

Slovak power market followed the trend of Czech market with the same big volatility.

Slovenian market followed trend on other European electricity markets.

SPOT prices increased WoW significantly and today gas is trading above the level 40,00 EUR/MWh for tomorrow. Gas market has been experiencing bullish trend since Monday thanks to unexpected production curtailment in Norwegian gas infrastructure as well as prolongation of maintenance works in British gas infrastructure. As a result less gas is being imported to Europe and level of gas storage filling is lagging the expected pace. The risk of colder winter and not having sufficient level of gas-in-storage in Europe is pushing gas price to record highs given we are in the middle of summer. Some relief comes from prospects of Nord Stream II operation after Biden-Merkel meeting, after which USA stopped sanctions against this project. Thanks to this, the project could be fully operational already this year importing up to 55 bcm of gas annually into Germany and from there further into Europe. The gas market however priced in already this situation due to Q1 2022 being cheaper than Q4 21. Some risks of the project full operation remain and if they materialize, we could see further price spikes especially for Q1 2022 trading period.

The information above is an excerpt from the applicable report referenced above. For a full and complete copy of this report please complete the form below, sign up for our newsletters or schedule a virtual meeting at your convenience.

Miroslav Ceman

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