EnergyScan

Energy markets news

ES-gas
October 25, 2021

Mixed price evolution

European gas prices were mixed on Friday. Spot prices were slightly up, supported by below-normal temperatures. By contrast, curve prices were slightly down as the additional drop in China coal prices continued to fuel hopes of an easing in global coal and gas markets. Asia JKM prices weakened on Friday:…
ES-economy
October 25, 2021

New Covid outbreak in China

While real estate is already expected to weigh negatively on the growth of the Chinese economy in Q4, a new wave of the variant delta epidemic is affecting 11 provinces and leading to new mobility restrictions for the population. Household consumption is expected to suffer, as it did in August. The slowdown in China…
ES-power
October 25, 2021

EUAs temporarily climbed back above 60€/t

Driven up by forecasts of much weaker wind output, lower French and Belgian nuclear availability and higher power demand, the power spot prices for today rose in northwestern Europe compared to Friday, with the German prices getting back near its neighbors’ after a week being mostly uncoupled. The baseload day-ahead…
ES-oil
October 25, 2021

Time spread jump

Crude prices hiked on early Monday, with ICE Brent reaching 86.1 $/b. The most surprising move came late Friday when ICE Brent forward curve steepened, with the Dec/Jan inter month spread reaching 93 cents, previously hovering around 70 cents. Dec-21/Dec-22 also jumped, to reach an impressive 9.73 $/b, rarely experienced that…
ES-oil
October 22, 2021

Asian weakness in fuel oil markets

Crude prices corrected, with ICE Brent Dec21 contracts back to 84.3 $/b, as diesel cracks in Europe weakened momentarily, due to a 1.3 mb diesel build in the ARA region. Stocks remained below seasonal averages, with 16.3 mb of inventories. Furthermore, long-range weather forecasts in the US and Europe were revised warmer…
ES-power
October 22, 2021

EUAs posted gains despite falling gas and power prices

The European power spot prices rebounded yesterday, lifted by forecasts of weaker wind output and French nuclear availability combined with a drop in temperatures strongly strengthening the power demand. The day-ahead prices averaged 173.91€/MWh in France, Belgium and the Netherlands, +29.73€/MWh with the highest prices observed in France at 209.65€/MWh…
ES-gas
October 22, 2021

Prices weakened on sharply lower coal prices

European gas prices weakened yesterday, pressured by the sharp drop in coal prices (which pulled parity prices with coal for power generation significantly down) as the Chinese government’s intervention plan to increase coal supply seems to produce effects. If these effects are confirmed, they could lead to a slowdown in…
ES-economy
October 22, 2021

Evergrande avoids default

The trend was rather optimistic in Asia after Evergrande, the Chinese property developer paid the interest due on a USD bond. There were 3 days left to do so before a formal default. Chinese authorities are clearly trying to buy time to come up with a credible crisis resolution plan, especially…
ES-gas
October 21, 2021

Slight price rebound

European gas prices rebounded yesterday during a session marked by low volatility. The slight increase in Asia JKM prices (+1.27%, to €104.205/MWh, on the spot; +1.76%, to €104.146/MWh, for the December 2021 contract) and in parity prices with coal for power generation (the strong rise in EUA prices offset the…
ES-power
October 21, 2021

EUA recovered from Tuesday’s fall amid boosted buying interest and stronger gas

Higher clean fuels costs and forecasts of slightly increased power demand raised the power spot prices in northwestern Europe yesterday, except in Germany where the current wind surge observed in the country maintained the prices at the same level. The day-ahead prices hence averaged 144.18€/MWh in France, Belgium and the…
ES-oil
October 21, 2021

Diesel carries the most upside risk

ICE Brent crude futures continued to be supported, at 85.2 $/b for the Dec21 delivery, as stocks data in the US and the ARA region surprised to the downside. Indeed, US stocks were depleted by a combined 11 mb, mainly due to drops in gasoline and diesel stocks, as the US turnaround…
ES-economy
October 21, 2021

Inflation expectations on the rise

Equity markets in Europe and the US, with the exception of the Nasdaq, continued to rise modestly yesterday, still supported by corporate earnings. But inflation expectations are increasing and bond yields remain close to their recent highs. The Fed’s Beige Book delivered a state of play of the US economy tinged with…
ES-economy
October 20, 2021

First decline in Chinese property prices since 2015

New home prices in China fell marginally in September for the first time since April 2015. A new property developer, Sinic, was also unable to meet its commitments on a USD loan. The situation remains tense, although “manageable” according to the Chinese authorities. Markets that were driven by positive sentiment until…
ES-oil
October 20, 2021

WTI, the next leg up ?

The ICE Brent Dec-21 contract is consolidating at the 85 $/b, at odds with the rally in US equity markets, which usually boosts commodity prices. Indeed, the recent report on positioning showed that money-managers were diverting exposure from the Brent market – 31k of reduced long exposure on the Brent instrument – to the WTI…
ES-power
October 20, 2021

EUAs fell below 55€/t in technical sell-off

The European power spot prices continued to drop yesterday and fell below the clean coal costs, driven down by lower clean fuels costs, the surging wind output, a weakening power demand and forecasts of stronger solar generation in Germany. The day-ahead prices hence averaged 84.33€/MWh in Germany, France, Belgium and…
ES-gas
October 20, 2021

Mixed price evolution

European spot gas prices were mixed yesterday, while curve prices were more clearly downward. The latter continued their technical correction in a context of rather stable Asia JKM prices (-2.34%, to €102.895/MWh, on the spot; +0.21%, to €100.933/MWh, for the December 2021 contract) and lower parity prices with coal for…
ES-power
October 19, 2021

EUAs and power prices retreated after early gas-induced gains

The European power spot prices dropped yesterday, pressured by forecasts of surging wind output and warmer temperatures weakening the power demand. The baseload day-ahead prices averaged 160.42€/MWh in Germany, France, Belgium and the Netherlands, -33.15€/MWh day-on-day and should continue to fall today as the German wind production is expected to…
ES-oil
October 19, 2021

Chinese new quotas impacts physical markets

China’s 4th and last batch of crude imports is impacting far east crude grades, as ESPO cargoes traded 6$ above the Dubai benchmark yesterday for December loading. It is likely that most ESPO loadings will sail to China, as independent refiners are looking for light sweet distillate rich grades that require…
ES-economy
October 19, 2021

Renewed optimism

ising equities, slightly easing bond yields, falling USD: optimism prevails despite the sharp slowdown in the Chinese economy highlighted yesterday by the Q3 national accounts. Concerns about rising inflation pushed the US 10-year yield up to 1.62%, but it then eased back to 1.57%. The EUR/USD exchange rate returned to its…
ES-gas
October 19, 2021

Strongly up after the results of the auctions, prices weakened afterwards

European gas prices were mixed yesterday, torn between concerns on Russian supply after auction results for November gas transport capacity indicated that Gazprom did not intend to increase its deliveries via Ukraine and Poland (see news) and profit taking. Asia JKM prices (-2.09%, to €105.358/MWh, on the spot; +0.21%, to…
ES-oil
October 18, 2021

Gasoline prices spark political reactions across continents

Crude prices continued to rally, at 85.7 $/b at the prompt for ICE Brent Dec-21 contract, as Asian nations multiplied calls to oil producers to boost production, as gasoline pump prices soared in the East. Indeed, The Japanese prime minister urged oil producers globally to ramp up production over the…
ES-power
October 18, 2021

EUAs retreated alongside the gas market

Despite a strong retreat of clean gas costs, the European power spot prices rose towards 200€/MWh for today, buoyed by forecasts of rather weak wind production and decent power demand. The day-ahead prices hence averaged 193.57€/MWh in Germany, France, Belgium and the Netherlands, +10.98€/MWh from Friday. After a very short-lived…
ES-economy
October 18, 2021

China’s GDP slows down significantly

China’s GDP growth fell to +4.9% yoy in Q3, but more importantly, GDP grew by only 0.2% qoq compared to the 2%+ variations in the summers prior to the 2020 crisis. Anti-Covid measures weighed on growth in August and power cuts took over to depress industrial activity in September. This can…
ES-gas
October 18, 2021

Prices weakened in Europe and in Asia

European gas prices weakened overall on Friday, pressured by forecasts of higher LNG supply in Europe in the coming days and profit taking. The drop in Asia JKM prices (-2.96%, to €107.606/MWh, on the spot; -10.04%, to €100.717/MWh, for the December 2021 contract) and in parity prices with coal for…
ES-oil
October 15, 2021

Chinese import quotas maintain pressure on independent refiners.

Crude markets continued to creep higher, with ICE Brent Dec21 contracts trading at 84.8 $/b on early Friday. Despite a poor EIA weekly report, with crude inventory builds of 6 mb, and refinery maintenance work denting throughput by 650 kb/d w/w, crude prices and time spreads continued to rise globally. There…
ES-power
October 15, 2021

EUAs climbed back above 60€/t amid rising gas and equities

Diverging from the neighboring countries, the German power spot prices dropped by 51.16€/MWh to 116.65€/MWh yesterday, pressured by forecast of stronger wind and solar output. Conversely, the day-ahead prices in France, Belgium and the Netherlands were supported by the higher fuels and carbon prices combined with expectations of lower French…
ES-gas
October 15, 2021

Prices have increased their rebound

European gas prices have increased their rebound yesterday, as the statements made by Russia’s Deputy Prime Minister Alexander Novak (saying that commercial gas deliveries via Nord Stream 2 may start right after the German regulator grants its permission) did not lift concerns about the level of Russian flows for the…
ES-economy
October 15, 2021

Long-term interest rates continued to fall ahead of important US indicators

Long-term interest rates fell again, although they are a bit on the rise this morning: the US 10-year is trading at 1.53%. US producer prices recorded their smallest increase of the year for the month, although they continued to accelerate yoy. This does not call into question the expected tightening of US monetary…
ES-oil
October 14, 2021

Diesel deficit growing in the Atlantic basin

According to the API industry survey, US crude stocks built by 5.2 mb w/w, while Cushing stocks dropped by 2.2 mb, lending support to the greater availability of crude in PADD3 and the Atlantic basin. Indeed, crude stocks are expected to build slightly in the US for the month of…
ES-power
October 14, 2021

Rangebound EUAs despite gains in the gas and power markets

The power spot prices were mixed in northwestern Europe yesterday, driven down in Germany and the Netherlands by forecasts of stronger wind output but slightly up in France and Belgium amid expectations of increased peak power demand. The day-ahead prices hence averaged 189.09€/MWh in the four countries, -3.58€/MWh day-on-day. The…
ES-gas
October 14, 2021

Prices continued to rebound

European gas prices continued to rebound yesterday, supported by uncertainty on the level of Russian flows for the coming months after President Putin said Russia is prepared to increase gas supplies to Europe if it receives requests for more gas from its customers (via long term contracts?). The rise in…
ES-economy
October 14, 2021

Inflationary risk still not taken seriously enough

The rise in the US inflation rate to 5.4% and the maintenance of core inflation at 4% in September reinforce the feeling that this transitory phenomenon linked to the Covid crisis… is bound to last. This is also what Fed members fear from the minutes of their last meeting. They confirmed that the announcement of a reduction…
ES-oil
October 13, 2021

China’s energy crisis in focus

Crude prices remained supported, with ICE Brent futures above 83 $/b for the Dec-21 delivery. The energy crisis in China is likely to prompt further imports from domestic refiners to rely increasingly on locally sourced energy consumption from refinery units through LPG burn, as Chinese coal futures are soaring markedly above last…
ES-power
October 13, 2021

Calm day for the energy markets

The European power spot prices continued to progressively rise yesterday, supported by forecasts of weaker wind output combined with stronger power demand for today. The day-ahead prices reached 192.68€/MWh on average in Germany, France, Belgium and the Netherlands, +9.58€/MWh day-on-day. The EUAs were seen overall flat yesterday with low exchanged…
ES-economy
October 13, 2021

Slight easing in bond yields despite increasing signs of inflationary pressures

The US 10-year yield eased slightly below 1.6% despite surveys showing increasing inflationary pressures. We mentioned the Bank of France survey yesterday, the main findings of which can be found here. But the NFIB survey of small businesses in the US also found that hiring difficulties are at an all time high and companies are…
ES-gas
October 13, 2021

Slight price rebound

European gas prices rebounded slightly yesterday, torn between conflicting fundamentals (in particular weak stock levels, but hopes for an increase in Russian flows). Asia JKM prices (-3.29%, to €100.547/MWh, on the spot; +3.77%, to €98.425/MWh, for the December 2021 contract) and parity prices with coal for power generation (up thanks…
ES-oil
October 12, 2021

Oil-to-gas switching still not materialising

Crude prices remained supported by the rest of the commodity complex, with the White House urging OPEC+ nations to increase their output. Since last Friday, the US crude market witnessed heightened volatility, as the prompt WTI time spread spiked from 60 cents to 110 cents intraday, without clear fundamental drivers, which…
ES-power
October 12, 2021

EUAs extended slight gains amid higher fuels prices and limited market activity

The power spot prices slightly rose yesterday in northwestern Europe, buoyed by the rising power demand, weak solar generation and higher gas prices, but limited by forecasts of increased wind production. The day-ahead prices hence averaged 183.09€/MWh in Germany, France, Belgium and the Netherlands, +4.14€/MWh day-on-day. The EUA extended modest…
ES-economy
October 12, 2021

Awaiting key US indicators

The US bond market was closed yesterday, bringing some calm after a sharp rise in yields last week that was not halted by the release of much lower than expected job creation figures. The equity markets are still down due to uncertainties in China (real estate, regulation, energy shortages and…
ES-oil
October 11, 2021

Electric spillovers

Futures crude markets continued to rise on early Monday, with WTI crude prompt prices nearing 81 $/b at the prompt while ICE Brent futures climbed at 83.8 $/b, amid deepening energy crises in India and China. Indeed, rolling blackouts are now implemented across most Indian provinces to curb coal consumption amid ultra-low…
ES-power
October 11, 2021

Power and carbon prices pursued their retracement on Friday

The weak wind production and increasing power demand due to the lowering temperatures maintained the power spot prices for today at decent levels in northwestern Europe. The day-ahead prices average 178.95€/MWh in Germany, France, Belgium and the Netherlands, -24.89€/MWh from Friday. The carbon prices fell below 60€/t on Friday as…
ES-gas
October 11, 2021

Mixed evolution yesterday

Supported by higher demand, European spot gas prices increased yesterday, partially filling their discount against near curve prices. These latter were down overall, pressured by the drop in Asia JKM prices (-8.21%, to €103.963/MWh, on the spot; -0.09%, to €94.853/MWh, for the December 2021 contract). Far curve prices were more…
ES-economy
October 11, 2021

Inflationary pressures are building. Monetary tightening approaches

The US job report for September was not as bad as the weak job creation might suggest, as we explained here on Friday. The acceleration of wages is obvious and cannot leave the Fed indifferent: it should announce the beginning of the reduction of its asset purchases on 3 November. The markets will then…
ES-oil
October 8, 2021

The White house starts to worry about fuel price inflation

Crude prices remained volatile on Tuesday, as sources close to the White House mentioned that an SPR release of potentially 60 mb was considered, while also mentioning that reinstating the crude oil export ban was a possibility. The White House backed-tracked later in the day, which boosted crude prices, with ICE Brent…
ES-power
October 8, 2021

Power prices dropped further while EUAs slightly recovered

Although strongly easing from the previous day’s peak, the European power spot prices remained at high levels above 200€/MWh yesterday, supported by the nonetheless still high gas prices, the below-average temperatures strengthening the power demand and a wind shortage. The day-ahead prices averaged 203.84€/MWh in Germany, France, Belgium and the…
ES-gas
October 8, 2021

Prices weakened again

European gas prices dropped again yesterday, pressured by more comfortable spot fundamentals and the strong fall in Asia JKM prices (-36.79%, to €104.713/MWh, on the spot; -7.07%, to €106.913/MWh, for the December 2021 contract). At the close, NBP ICE November 2021 prices dropped by 27.940 p/th day-on-day (-10.22%), to 245.510…
ES-economy
October 8, 2021

Optimism returns to the markets but rates continue to rise

The temporary deal on the US debt ceiling also gives the Democrats time to agree on the stimulus packages that the Biden administration wants to push through. This may explain why the markets reacted so favourably to the lifting of a risk they never really took seriously (a US default). The sharp rebound…
ES-oil
October 7, 2021

Diesel supply and demand shocks

Diesel cracks are soaring globally, which may indicate that there is stronger demand, partly due to oil-to-gas switch and a recovery in aviation demand that reduces diesel supply. Yet, the strength in cracks, the main profitability indicator for refining economics in Europe, are now almost exclusively driven by natural gas prices,…
ES-power
October 7, 2021

EUAs dropped below 60€/t as the energy markets faced a record volatility

The European power spot prices spiked to record levels near 300€/MWh yesterday, driven up by the morning hefty surge of fuels prices and forecasts of wind shortage and stronger demand for today. The day-ahead prices averaged 301.48€/MWh in Germany, France, Belgium and the Netherlands, +118.94€/MWh day-on-day. The EUAs collapsed by…
ES-gas
October 7, 2021

European prices closed lower after a very volatile session

After a very volatile session (see our news), European gas prices closed lower yesterday, in line with the sharp drop in coal parity prices. Asia JKM prices on their side closed in a mixed way: +42.35%, to €165.665/MWh, on the spot; -8.76%, to €115.111/MWh, for the December 2021 contract.  Norwegian…

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