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 due the country’s more temperature sensitive power demand, while prices remained much lower in Germany at 71.87€/MWh (still +10.37€/MWh) due the still very high wind generation expected today.
After a bearish opening and a short-lived test of levels below the 100-day moving average, the EUAs reversed and climbed back towards 58€/t, buoyed by a strong auction result (23-cent premium over secondary market and 1.80 cover ratio) and possibly the deep dive of coal prices offsetting the fading gas prices. The EUA Dec.21 contract eventually settled at 57.98€/t, 20-cent above Wednesday’s close, and is currently trading above 58€/t, although the near long-term uptrend line broken earlier this week might now materialize as a resistance. A settlement above this levels (standing around 59.10€/t) today could point toward further bullishness, but traders tend to take their profits on Friday, ahead of the weekend, which could pressure the market at the end of the session.
Conversely, the power curve prices posted heavy losses on Thursday, driven down by the falling fuels prices.
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