EnergyScan

Energy markets news

ES-gas
November 26, 2021

Slight price drop

Amid unchanged fundamentals, European gas prices weakened slightly overall yesterday. The (moderate) drop in Asia JKM prices (-1.91%, to €107.482/MWh, on the spot) helped accompany the drop. On the spot pipeline supply side, Norwegian flows were slightly up yesterday, at 348 mm cm/day on average, compared to 343 mm cm/day…
ES-power
November 26, 2021

EUAs finally reached 75€/t

The power spot prices faded in northwestern Europe yesterday, driven down by forecasts of stronger wind output despite the colder temperatures. The day-ahead prices averaged 220.84€/MWh in Germany, France, Belgium and the Netherlands, -26.83€/MWh day-on-day. The EUAs pursued their sharp ascend and climbed above 75€/t to another fresh record on…
ES-oil
November 26, 2021

Outright crude crashes

By falling below 80 $/b, ICE Brent front-month future declined by close to 4.5% within a day. Yet, front-month time spreads remained supported, at 127 cents. The decline in US bond yields and Asian equity markets likely impacted crude prices. Global financial markets remain worried about the rise of a potential new…
ES-economy
November 26, 2021

Concern about the emergence of a new Covid variant

With markets slowing down due to Thanksgiving in the US, news of the rapid diffusion of a new variant (B.1.1.529) in South Africa and neighbouring countries has spread like wildfire and has already had notable consequences: a sharp decline in Asian equity markets and a fall in bond yields, with the US…
ES-oil
November 25, 2021

Japanese oil-to-gas switch remains elusive

Crude prices remained elevated, at 82.2 $/b for ICE Brent front-month price, despite the SPR release announcement and a relatively neutral EIA weekly snapshot. Total crude inventories declined (accounting for the SPR release of last week) while distillate stocks declined further, likely due to a slower than anticipated ramp-up in US…
ES-power
November 25, 2021

EUAs sky-rocketed on German carbon floor plan

Besides in France where the colder temperatures and weakening nuclear availability lifted the prices further up, the European power spot prices retreated yesterday, pressured by forecasts of stronger wind output. The day-ahead prices averaged 229.51€/MWh in Germany, Belgium and the Netherlands, -40.13€/MWh day-on-day, and 302.14€/MWh in France, +6.32€/MWh dod. Trading…
ES-gas
November 25, 2021

European gas prices increased again yesterday

European gas prices increased again yesterday, still supported by cold weather and concerns on Nord Stream 2. The strength in Asia JKM prices (+6.47%, to €109.571/MWh, on the spot; +0.80%, to €110.330/MWh, for the January 2022 contract) helped accompany the bullish momentum. On the spot pipeline supply side, Norwegian flows…
ES-economy
November 25, 2021

The situation is becoming untenable for central banks

The avalanche of statistics published yesterday in the US before the long Thanksgiving weekend confirmed the reacceleration of activity and growing inflationary pressures: higher than expected household spending and income in October, rebound in investment (durable goods orders), lowest level of unemployment claims since 1969, but a drop in household…
ES-economy
November 24, 2021

Busy day before Thanksgiving in the US

Markets are hesitant: US bond yields eased after approaching their recent highs yesterday. The 10-year bond touched 1.68%. The economic indicators continue to show a solid global economic recovery, which carries serious inflationary risks, and which could change the hitherto very confident analysis of central banks on the transitory nature…
ES-gas
November 24, 2021

Prices rebounded on cold weather and US sanctions against Nord Stream 2

European gas prices rebounded yesterday, supported by cold weather and the US State Department decision to impose sanctions on a Russia-linked company and its work ship involved in finishing the Nord Stream 2 gas pipeline. The rise in Asia JKM January 2022 prices (+6.08%, to €109.455/MWh, while spot prices dropped…
ES-power
November 24, 2021

EUAs failed again to close above 70€/t

The European power spot prices continued to rise yesterday, supported by forecasts of weaker wind and solar generation and colder temperatures strengthening the power demand. The day-ahead prices averaged 276.17€/MWh in Germany, France, Belgium and the Netherlands, +26.36€/MWh day-on-day. The EUAs failed to set a new record for the first…
ES-oil
November 24, 2021

Release the barrels !

The US finally announced the release of 50 mb of crude oil into the market, coordinated with Japan, South Korea, the UK and China. ICE Brent crude rallied strongly, and snapped back to 82 $/b at the front, while font time spreads rallied to 100 cents. In total, the volumes released globally…
ES-power
November 23, 2021

EUAs finally climbed above 70€/t

The forecasts of lower temperatures supported the power spot prices in northwestern Europe yesterday which climbed to 249.81€/MWh on average in Germany, France, Belgium and the Netherlands, +21.06€/MWh day-on-day and +16.63€/MWh from the previous week. Disregarding the weaker energy complex and the growing concerns over the worryingly soaring new Covid-19…
ES-oil
November 23, 2021

SPR day ?

Details of a potential US SPR release are emerging, with the announcement expected today. First, it is likely that the announcement will concern multiple countries. We expect China and Japan to respond positively to the US demands. Secondly, there could be between 30 and 60 mb of crude delivered to…
ES-gas
November 23, 2021

Prices weakened again, slightly

European gas prices weakened again yesterday. Amid domestic fundamentals largely unchanged, the moderation in Asia JKM prices (-4.89%, to €103.426/MWh, on the spot; -0.36%, to €103.179/MWh, for the January 2022 contract) continued to exert downward pressure. On the spot pipeline supply side, Norwegian flows were almost stable yesterday, at 343…
ES-oil
November 22, 2021

Collapse at the prompt

The possibility of a coordinated SPR release is seriously denting the sentiment and upside risk in crude oil futures markets. Japan is now considering seriously an SPR release, while China confirmed that it was already destocking its strategic stocks. The US also released stocks last week, but these releases were part…
ES-gas
November 22, 2021

European prices weakened on lower Asian prices

European gas prices weakened last Friday. Amid unchanged domestic fundamentals, the moderation in Asia JKM prices (-0.64%, to €108.740/MWh, on the spot; -8.16%, to €103.547/MWh, for the January 2022 contract) exerted downward pressure. On the spot pipeline supply side, Norwegian flows were stable on Friday, at 344 mm cm/day on…
ES-economy
November 22, 2021

The resurgence of the pandemic in Europe weighs on the euro

The EUR/USD exchange rate hit a new low on Friday at 1.1250 and could weaken further. The announcement of a strict lockdown in Austria sent eurozone bond yields plunging, fueling fears of a further severe economic slowdown. Among the larger countries in the zone, the highest risks are in Germany, where vaccination rates are lower and…
ES-power
November 22, 2021

EUAs hit new record despite weaker energy complex and rising covid concerns

The European power spot prices rose above to 230€/MWh for today (and up to 251.84€/MWh in France), lifted by forecasts of lower wind and hydro generation combined with colder temperatures strengthening the power demand. The day-ahead prices averaged 228.75€/MWh in Germany, France, Belgium and the Netherlands, +33.20€/MWh from Friday but…
ES-power
November 19, 2021

Another day, another fresh record for carbon prices

The European power spot prices observed mixed variations yesterday, slightly up in France amid expectations of lower nuclear availability, but down in Belgium, Germany, and the Netherlands on forecasts of strong wind and weaker demand. The day-ahead prices averaged 195.56€/MWh in the four countries, -8.63€/MWh day-on-day. After bearish morning the…
ES-oil
November 19, 2021

Diesel sails West

Coordinated SPR releases continue to be the hot topic for crude markets, with China expected to release light sweet crude stocks, in line with the destocking that occurred over the year. Now, China can easily score points with Washington by following the US guidelines. It is likely that China continues to…
ES-gas
November 19, 2021

Prices were mixed again yesterday

European gas prices were mixed again yesterday: slightly down on the spot, slightly up on the curve. Amid ongoing concerns on relatively low Russian supply, the moderation in Asia JKM prices (-5.71%, to €109.437/MWh, on the spot; +0.31%, to €112.743/MWh, for the January 2022 contract) helped limit the upward pressure.…
ES-economy
November 19, 2021

No real market driver

The markets are fairly calm and should remain so. In Asia, a certain optimism prevails after the announcement of a new super stimulus plan in Japan, the value of which would reach nearly 10% of GDP. However, this does not impress many people any more. What will be the reality behind…
ES-gas
November 18, 2021

Strongly up for most of the session, prices weakened at the close

European gas prices were mixed yesterday, rising sharply for most of the session before falling back at the close. Strong Asia JKM prices (+13.24%, to €116.064/MWh, on the spot; -1.48%, to €112.397/MWh, for the January 2022 contract) fueled the initial upward movement. On the pipeline supply side, Norwegian flows continued…
ES-oil
November 18, 2021

Time spreads discount SPR release risk

Crude prices weakened, to reach 79.4 $/b for ICE Brent January contracts, as Biden tried to convince other countries to release crude from their domestic SPR. Front-month time spreads remained relatively supported, close to 100 cents, which means that the market is not materially concerned by these. Indeed, Japan already declined the…
ES-power
November 18, 2021

EUAs gave back gains after hitting a fresh intraday record

If the power spot prices rose by 16.33€/MWh on average in France, Belgium and the Netherlands to 225.64€/MWh amid expectations of stronger power consumption and early gains in gas and carbon prices, the price German price dropped by 40.70€/MWh to 139.90€/MWh as the country’s wind generation is forecasted to surge…
ES-economy
November 18, 2021

A further rate cut is expected in Turkey

It is almost certain that the Turkish Central Bank will announce a 3rd consecutive and significant rate cut today (-100 to -150bp). Since September, the key rate has plunged below the inflation rate which should soon cross the 20% mark due to the collapse of the currency: -30% since the beginning of…
ES-power
November 17, 2021

EUAs hit new record on bullish gas and option trading

The European spot prices started to fall yesterday, driven down by forecast of surging wind output, and should drop further today with a German wind generation expected to reach 28GW tomorrow. The day-ahead prices for today averaged 202.12€/MWh in Germany, France, Belgium and the Netherlands, -31.07€/MWh day-on-day but in line…
ES-gas
November 17, 2021

Prices up after certification procedure of Nord Stream 2 AG was suspended

European gas prices increased strongly yesterday, supported by the Germany’s energy regulator (the Bundesnetzagentur) to suspend the procedure to certify Nord Stream 2 AG as an independent transmission operator, which brings new uncertainty over when the pipeline will begin commercial operations. The rise in Asia JKM prices (+8.82%, to €102.492/MWh,…
ES-economy
November 17, 2021

The euro continues to weaken

The publication of very good activity data in the US reinforced the rise in bond yields (the US “10 year” has recovered 20bp in 4 sessions) and pushed the dollar to its highest level since July 2020. Retail sales rose by 1.7% in October and industrial production rose by 1.6%. The NAHB housing…
ES-oil
November 17, 2021

Stocks dynamics remains mysterious

Global crude stocks are the subject of interest for many market participants lately. Sattelite imagery providers are reporting steep draws since November, especially Kayrros. On the other side, more conventional surveying techniques such as the API survey reports stock builds in the US (0.6 mb last week for crude). The IEA also released…
ES-oil
November 16, 2021

Nigerian crude demand remains elusive

Crude prices continued to hover around the 82 $/b for ICE Brent Jan delivery, amid falling diesel cracks in Europe and the US. Indeed, refining margins have weakened to flip into contango at the prompt for Europe and Asia, as diesel prices softened, fuel oil prices dropped heavily, while gasoline and…
ES-power
November 16, 2021

EUAs broke above all-time high on combination of bullish factors

Except in the Netherlands where it edged down, the power spot prices slightly increased in northwestern Europe yesterday with support from higher gas and carbon prices combined with forecasts of high power demand and weaker wind output. The day-ahead prices averaged 233.18€/MWh in Germany, France, Belgium and the Netherlands, +5.22€/MWh…
ES-gas
November 16, 2021

Prices up as Gazprom did not book additional transport capacity

European gas prices increased yesterday, supported by the results of the monthly gas transmission capacity auctions with Gazprom not booking additional capacity into Western Europe. The market ignored the increase in spot pipeline supply, probably worried about the upcoming fall in Norwegian flows. Norwegian flows rebounded to normal yesterday, to…
ES-economy
November 16, 2021

Sharp fall in the euro

The EUR/USD exchange rate plunged yesterday after Christine Lagarde reaffirmed her belief that inflation would quickly fall below 2% and that an ECB rate hike was highly unlikely by 2022. From a technical point of view, the next support for the euro is at 1.1290 USD. It is possible that it will be reached…
ES-power
November 15, 2021

EUAs quickly retreated after hitting a new 5-week high

The power spot prices soared near 230€/MWh in northwestern Europe for today, lifted by forecasts of higher demand and weak wind and solar generation. The day-ahead prices averaged 227.96€/MWh in Germany, France, Belgium and the Netherlands, +57.19€/MWh from Friday and +27.55€/MWh week-on-week. The EUAs climbed to a new 5-week high…
ES-gas
November 15, 2021

Mixed price evolution

European gas prices were mixed on Friday, torn between lower Norwegian supply, hopes of higher Russian flows and the additional easing in global coal markets. Norwegian flows dropped to 282 mm cm/day on average on Friday, compared to 301 mm cm/day on Thursday, still impacted by the unplanned outages at…
ES-oil
November 15, 2021

SPR release in the void ?

Crude prices remained pressured, sticking to the 80-82 $/b range, as the possibility of a US SPR release limited prompt tightness. With such growing political pressure and uncertainty, money managers continued to cut their exposure to major futures markets (Brent, WTI). The Brent open interest from financial players declined by…
ES-economy
November 15, 2021

Deceptive rebound of activity in China

Activity seemed to accelerate in China in October: +3.5% after +3.1% yoy for industrial production and +4.9% after +4.4% yoy for retail sales. In fact, only industrial production returned to normal growth for the month, as the energy supply problems were resolved. But the chart below clearly shows that this is not…
ES-oil
November 10, 2021

Confliciting messages

Yesterday’s Short Term Energy Outlook published by the EIA showed a relatively balanced global oil market, with stock builds in H1 22, which was a key report for the US administration to decide whether an SPR release was needed. While the STEO was relatively underwhelming, the API survey showed another…
ES-power
November 10, 2021

EUAs gave back early gains on falling gas prices

The European power spot prices rebounded yesterday, driven up by forecasts of lower wind and solar generation and colder temperatures strengthening the power demand. The day-ahead prices averaged 200.15€/MWh in Germany, the Netherlands, France and Belgium, +25.06€/MWh day-on-day with the largest gains posted by the two latter which rose to…
ES-gas
November 10, 2021

Prices down on higher Russian supply

European gas prices dropped yesterday as the long-awaited rise in Russian flows seems to materialize. Indeed, Gazprom said yesterday it had started to implement a plan for gas injection this month into five of its European storage facilities. Yesterday, Russian supply was higher (to 269 mm cm/day on average, compared…
ES-economy
November 10, 2021

Back to reality

The decline in long term bond yields was accentuated yesterday, pulling the US 10 year down to 1.43%, mainly on the idea that Joe Biden might decide to replace Jerome Powell with Lael Brainard, the advocate of “infinite QE”. In reality, both have always voted exactly the same way at Fed meetings and…
ES-oil
November 9, 2021

Summarising Biden’s toolbox

Crude prices remained stable, hovering around 83.5 $/b for the January ICE Brent contract. Expectations of a response from the US administration raised uncertainty in the crude oil market, as Biden’s toolbox for limiting the current price rally could be disruptive for sections of the market. If Biden decided to release stocks…
ES-gas
November 9, 2021

Prices up as Russian supply disappointed

European gas prices increased yesterday as the hopes of an increase in Russian flows have been dashed. Indeed, Gazprom did not book extra transportation capacity at daily auctions on Sunday, and actually Russian flows remained almost stable yesterday, at 252 mm cm/day. On their side, Norwegian flows were up, averaging…
ES-economy
November 9, 2021

The market is waiting for US inflation figures

No significant news yesterday. US equity markets did find the resources to go a little higher on speculation that Joe Biden may decide to appoint Lail Brainard to replace Jerome Powell as Fed chair. This would probably ensure an even more accommodative bias in monetary policy, but it is unlikely…
ES-power
November 9, 2021

EUAs broke above recent resistances on gas gains

The power spot prices fade yesterday in northwestern Europe, weighted by forecasts of higher German wind production, French nuclear availability and hydro generation, although the stronger demand and rising fuels and carbon prices may have limited the losses. The day-ahead prices averaged 175.09 in Germany, France, Belgium and the Netherlands,…
ES-oil
November 8, 2021

Saudis hike their OSP capture the Asian refining profit margin

Crude prices continued to be supported, at 83.5 $/b on early Monday, as the OPEC saga ended on Friday with Saudi official selling prices being disclosed for the month of December. Surprisingly, The Saudis hiked crude differentials to Asia by 1.4 $/b against the Oman/Dubai average, one of the highest…
ES-economy
November 8, 2021

Bond yields continue to fall despite a good US job report

The easing in bond yields that began after the Fed meeting and especially the Bank of England’s decision to postpone monetary tightening continued on Friday after a very solid US employment report: job creation picked up and wages continued to accelerate (more details here). The markets focused on the fact that the…

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