Daily (23.05.2019): European carbon prices spiked by nearly 4% on Wednesday, on looming tight supply and higher gas prices

23/05/2019 11:48 Daily


Crude oil prices dropped on Wednesday, after data showed that U.S. crude inventories surged unexpectedly amplifying concerns over a weaker oil demand raised by the lengthy U.S.-China tariff dispute. WTI futures closed 2.7% lower at 61.42 USD/bbl, in tandem with falling equities. On the other side, rising tensions between Washington and Iran coupled with OPEC’s intentions to continue output cuts helped limit the fall in prices. As a result, Brent crude price dropped by 1.7% to 70.99 USD/bbl. 

UK wholesale gas prices rose on Wednesday, amid reduced Norwegian flows and expectations for robust consumption on forecasts for cooler temperatures in the coming week. The NBP spot added 1% to end at 30.00 p/therm. Along the curve, the contract for delivery in October 2019 increased by 1.7% to 42.01 p/therm.


European day-ahead electricity prices diverged on Wednesday. The price for the German spot power contract jumped by 1.5% to 40.67 EUR/MWh, as limited wind generation outweighed a stronger solar power output. In the meantime, the equivalent French contract lost 1.1% to settle at 39.67, in anticipation of firmer nuclear availability and lower consumption.


Along the curve, power prices spiked on Wednesday, following the bullish movements on the carbon and gas markets. The German power contract for delivery in 2020 traded 2.3% higher at 49.12 EUR/MWh, while the equivalent French contract was 2.1% up at 51.15 EUR/MWh.


EU carbon prices added ground for the third straight day on Wednesday, stimulated by the tight supply outlook for next week as well as the upward evolution in gas prices. The price for the contract expiring in 2020 soared by 3.9% to 26.61 EUR/tonne.

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