Daily (11.11.2020): European Cal’21 power prices reversed gains on Tuesday as vaccine euphoria vanished

11/11/2020 09:35 Daily


Crude oil prices continued to add ground on Tuesday amid optimism generated by a vaccine against COVID-19 and a possible intervention of OPEC + alliance. Moreover, bigger than expected weekly U.S. oil storage draws helped WTI to extend gains. Hence, Brent crude soared by $1.21, or 2.9%, to settle at $43.61 a barrel. Meanwhile, U.S. WTI crude increased by 1.07, or 2.7%, to end at $41.36 a barrel.

A milder weather and strong LNG storage levels dragged down British near-term gas prices on Tuesday. As a result, NBP spot fell by 4.5% to 36.30 p/therm. Further along the curve, the gas price for year-delivery decreased slightly by 0.1% to 37.08 p/therm, neglecting bullish oil markets.

European spot electricity prices dropped sharply on Tuesday amid forecasts indicating continued mild weather and higher nuclear availability in France.  In this context, the German day-ahead power price fell by 6.4% to 45.06 EUR/MWh, while the French equivalent contract plunged by 13.8% to 39.78 EUR/MWh.

Year-ahead power contracts reversed recent gains, mainly due to weaker carbon markets and as the initial “euphoria” about a Covid-19 vaccine calmed down. Consequently, the German Cal’21 power decreased by 0.9% to 39.45 EUR/MWh, while the similar power contract in France settled at 42.70 EUR/MWh, posting a 1.1% loss day-on-day.

EUAs expiring in 2021 edged 1.2% lower at 26.37 EUR/tonne on Tuesday amid softer auction result and fundamental weakness from milder weather.

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