Daily (16.08.2019): EU carbon prices at a new 5-week low on Thursday, due to speculative selling, Brexit fears and a weak macroeconomic context

16/08/2019 11:26 Daily

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Intensifying recession fears spurred by downbeat economic data in Europe and China dragged the crude oil prices lower on Thursday. China’s warning about potential countermeasures in response to the latest U.S. tariff on Chinese goods also weighed on the market. Moreover, the rise in the U.S. crude inventories, extended unexpectedly into the second week, added pressure on crude prices. Under such circumstances, Brent crude dropped by 2.1% to $58.23 a barrel, while WTI futures lost 1.4% to trade at $54.47 a barrel.

Despite a largely balanced system, British wholesale gas prices sank further on Thursday, amid persistent thin demand due to robust power output and cool weather. The NBP day-ahead price dipped by 4.5% to 26.50 p/therm. On the curve, the contract price for delivery in June 2020 fell by 1.6% to 42.67 p/therm.

 

The European spot electricity prices rebounded on Thursday, as demand is expected to increase on the last working day of the week, after a holiday in parts of Western Europe. The price for the French day-ahead power contract soared by 31.3% to 31.29 EUR/MWh, in the context of reduced nuclear power output. At the same time, the equivalent German contract ended 17% higher at 35.69 EUR/MWh, supported by a decline in wind generation. 

 

Along the curve, power prices remained bearish, as carbon prices continued to weaken, alongside with the entire energy complex. Mounting concerns over a recession that would curb power consumption in Germany trimmed by 0.6% the German power price for 2020-delivery which settled at 48.64 EUR/MWh. In the meantime, the equivalent French contract edged down by 0.3% at 50.90 EUR/MWh.

 

The EU carbon prices extended their plunge to a new five-week low on Thursday, influenced by speculative selling, Brexit uncertainty and a gloomy macroeconomic backdrop. A sluggish energy complex put more pressure on prices. Consequently, the price for the contract expiring in 2020 tumbled by 3.4% to 26.26 EUR/tonne.

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