The European power spot prices eased yesterday, weighed by forecasts of milder temperatures and stronger wind output. The day-ahead prices averaged 193.13€/MWh in Germany, France, Belgium and the Netherlands, +21.55€/MWh day-on-day. Prices should observed a strong volatility next week, with the wind output expected to sharply drop on Monday before quickly surging back over the following days.
Ignoring the slight gains of the gas market, the EUAs faded yesterday alongside the financial markets with again thin exchanged volumes, only 13.4 million of allowances changing hands via the Dec.22 benchmark contract whereas 28.4m were exchanged on average per day last year. After a late rebound, the EUA Dec.22 eventually closed at 86.74€/t, -0.84€/t from Wednesday’s settlement. Looking forward, the resumption of the auction next week could weigh on the market, although the coming supply should be largely anticipated and hence could limited impact on prices. The technicals are sending mixed signals, the Relative Strength Index pointing to a slightly overheated market while the MACD is suggesting a potential new upward trend. Some market participants also mentioned the uncertainty (and their subsequent concern) regarding whether the 2022 free allocation will take place before or after the April compliance deadline, which is likely to limit further the number of sellers in the market.
On the power side, the forward prices posted limited gains on the front of the curve, buoyed by the firmer gas prices, but waned on the back end.
Technical analysis on EUA first Dec. prices
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