EU Power Pricing Trends | 11 June 2021
Power demand was supported last week across northwest Europe as temperatures averaged 4° above seasonal norms, increasing cooling loads. On the price curve, further gains in gas benchmarks - driven by acute supply tightness and aided by a increase in the cost of emitting carbon – led forward calendar year contracts higher. Meanwhile, gains in coal and oil provided additional support. In the Nordic region, a 1.8TWh increase in hydro reserves, with a further 2.4TWh improvement expected for the coming week, supported a pullback in the annual benchmark price.
EU Natural Gas Pricing Trends | 11 June 2021
Tight natural gas supplies steered European gas prices higher last week. An outage at Norway’s Kollsness processing plant, as well as extended maintenance at its largest gas field, Troll, saw Norwegian southbound gas flows drop by almost half; and fail to recovery until Friday. LNG imports into NW Europe also fell week-on-week, supporting bullish price movements, particularly with hot weather forecast across central Europe for the coming week. With gas demand already elevated across Europe for storage reinjection, the potential for increased gas demand for cooling certainly lent support to the price of forward contracts. Ultimately, however, it was the low European storage stocks – ~42% of capacity versus the 5-year average of ~54% for this time of year – that continued to underpin the bullish narrative.
EU Energy Complex | 11 June 2021
Following three consecutive weeks of declines, European carbon prices increased for 4 straight sessions last week; rebounding after finding strong technical support at €49/tonne. Although, with carbon EUAs seemingly trading range-bound and the allocation of free allowances on the horizon, Friday saw some of the week’s gains pared. Coal continued to push higher in a week where futures reached afresh 2-year high, providing additional support to European gas and power prices. Meanwhile, oil also climbed to the highest in more than two years amid fading prospects of a quick return of Iranian supply, in addition to a rebound in air travel in the United States.
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