EU Power Pricing Trends | 9 April 2021
Carbon EUAs jumped early last week, amid a wave of compliance buying and bullish spill-over from financial markets and, despite falling day-on-day throughout the remainder of the week, prices notched a 3% gain for the week. The reaction from power markets was relatively muted, however, as declines in oil and feedstock futures underpinned a weaker energy market complex. Forecasts for warmer weather in late April allayed any lingering concerns of another extended period of cold weather, adding to the bearish headwinds. The Nordic annual contract posted the largest gains among other benchmarks as forecasts of low rains increased the chances of reservoir withdrawals later in the month.
EU Natural Gas Pricing Trends | 9 April 2021
European LNG imports continued to rise last week, climbing 13% Friday-to-Friday. A rise in flows from Norway and Russia to northwest Europe rounded off the strong supply-side narrative. The robust supply schedule, alongside falling crude oil and coal prices, lead gas prices lower across major European hubs. Nevertheless, total European gas in storage fell week-on-week as temperatures and wind levels dropped, limiting the downside on gas futures throughout the week.
EU Energy Complex | 9 April 2021
Carbon EUAs rallied sharply on the first day back after Easter Monday, bolstered by strong compliance demand ahead of the April 30th deadline for emitters to register their 2020 emissions. Further support was provided to the carbon market by a jump in global equity indexes, reflective of an emerging consensus that the post-virus period of global growth will be explosive. European coal trimmed half of March’s gains in the first week of April, despite the bullish macroeconomic forecasts, as near-record carbon prices bite generator margins. Oil benchmarks, like coal, fell on the week as global coronavirus cases rise further – Canada’s most populous province declared a state of emergency. The growing alarm comes just days after OPEC+ agreed to taper existing output curbs in the coming months.
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