Daily (11.09.2019): A strong rise in European gas and power prices on Tuesday following several bullish news

11/09/2019 12:16 Daily

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The abrupt firing of the combative U.S. national security advisor John Bolton raised a softer oil supply outlook, leading to a decline in oil prices on Tuesday. The news spurred speculations that U.S. might head for a potential de-escalation in tensions with Iran and an improved trade with Venezuela. However, gains were capped by earlier assurances of continued output cuts from OPEC and its allies. Consequently, WTI futures fell by 0.8% to 57.40 USD/bbl, while Brent crude edged down by 0.3% to 62.38 USD/bbl.

British wholesale gas prices jumped on Tuesday, amid nuclear power availability concerns following EDF’s announcement about technical deviations found on some of its French reactors. Moreover, an EU court overturned a decision allowing Russia to convey more gas via the Opal pipeline. The NBP spot price soared by 9.4% to 29 p/therm, as falling temperatures raised residential consumption. On the curve, the Q1 2020 delivery contract traded 11.1% higher at 55.61 p/therm.

 

The European spot power prices slumped on Tuesday, on forecasts for stronger wind power output. The German day-ahead power price ended 7.9% lower at 33.93 euros/MWh, amid flat consumption. The French spot electricity contract posted the same drop, closing at 32.79 euros/MWh, due to falling demand.

 

Concerns over the extent of the French nuclear issue and its bearish impact on nuclear power supply this winter pushed the forward electricity prices to multi-year highs on Tuesday. A Dutch decision to close the Groningen gas field in 2022, eight years ahead of the plan, also boosted prices. The price for the German Cal20 delivery contract surged by 4.1% at 47.92 euros/MWh. The French equivalent price soared by 5.8% to 52.65 euros/MWh.

 

The latest energy news were also bullish for the European carbon prices, which surged in line with gas and coal prices on Tuesday. The price for the contract expiring in 2021 spiked by 6.7% to 27.31 euros/tonne.

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