Czech Energy Pricing Trends - 30 Apr. 2021

CO2 price (Dec-21) increased by 0,7 EUR/t WoW to level 47,79 EUR/t WoW and hit a new fresh historical maximum. Today CO2 was trading around 48,00 EUR/MWh. CO2 continues to test its historical maximums towards the end of the compliance season (30.4.). Brent price (Jun21) increased by 3,16 USD/bbl WoW to 68,56 USD/bbl. Today's price fell below 68,00 level. Coal API (June21) increased by 2,0 USD/t WoW to 76,55 USD/t and today is trading above 77,00 level.

The weather still plays a significant role in price development, and higher gas prices push power prices up as well. Bullish expectations about oil demand this summer pushed the oil market up. With gas price increases, coal as competing fuel increases too.

Near-curve market, after easing in beginning of week, grew significantly WoW. There are three main factors:

  1. Weather reforecast for the beginning of May where the western part of Europe shall experience colder weather than previously forecasted
  2. Gazprom Export did not book interruptible capacity via Ukraine (as widely anticipated by the market) - which means fewer pipeline imports towards Europe in May and fewer gas injections into empty European gas storages.
  3. Growing Asian gas prices are attracting more LNG gas - which means less LNG gas imports for Europe this summer.

These three factors pushed summer gas up significantly. Along with higher oil, the price in the far-curve market grew as well. If the scenario of low LNG imports materializes, gas prices in Europe can remain elevated throughout the whole ongoing gas season.

Czech koruna had quite stable development during last week. YoY changes are very small. Mr. Benda, a member of CNB board, has at least twice this week stated that CNB has tools and will to cut possible inflation. He says that as long as part of the Czech economy is closed and entire sectors struggle to survive, the interest rate growth is premature. He also thinks that Czech Republic will probably raise interest rates fewer times this year than official projections show because of the lingering impact of the COVID pandemic.

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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