Czech Energy Pricing Trends - 29 Oct. 2021

CO2 price (Dec-21) increased by 0,59 EUR/t WoW to level 58,57 EUR/t WoW. Today market was quite volatile trading in 58,00-59,50 territory.  Brent price (Dec21) decreased by 0,29 USD/bbl WoW to 84,32 USD/bbl. Today market traded around 84,40 level. Coal API (Nov21) increased by 4,1 USD/t WoW to 170,1 USD/t.  Today coal decreased significantly to level 140 (last trade 14.54 hrs CET). The whole energy mix was trading sideways until Wednesday, but since Thursday it weakened quite significantly - especially coal and gas - probably as reaction to V. Putin´s words that Russia will increase gas flows to Europe in beginning of November. The falling of coal and gas price continues today, with more than 15% DoD decrease. The power market was thus affected especially on short market, where Front Month and Front Quarter are most affected. Price decline was supported by higher renewables production thus decreasing SPOT market as well.

Slovak power market followed the trend of Czech market.

Slovenian market followed trend on other European electricity markets.

SPOT prices were trading until Wednesday around 88,00 level, but since Thursday price began to fall. Current market price for Monday is at level 66,625 EUR/MWh.

Gas market is experiencing significant decline since yesterday after V. Putin's words that Russia will increase gas flows into Europe as of 8th November. This shall follow the 100% filling of storages within Russian territory by 1st November, which was the goal set by Russia/Gazprom.  The increased flows into Europe will, however, coincide with period of higher gas demand due to arrival of winter period and colder weather.  Weather forecast shows that temperatures in Europe should turn into below-average starting from 5th November.  Higher renewables electricity production in next week shall keep temporary gas demand lower.  The volatility will remain huge in current tight gas energy market and price will be driven by weather development, certification process of Nord Stream II project and competing fuels market (coal and oil). Bullish news came from weather forecasters who see a risk of La Nina effect which normally results in colder weather in northern hemisphere. The net injection into European storages occurred a couple days of this week; however, weekly balance is negative (-0,28% WoW) and current status is 77,08% fullness (as of Wednesday). Starting 5th November we can expect that Europe will turn into net withdrawals for good.

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Miroslav Ceman

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