Monetary tightening leads to a major banking crisis
Macro & Oil Podcast #31 In this week’s Macro & Oil report of the EnergyScan podcast, Olivier Gasnier tells us about the Silicon Valley Bank…
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The European power spot prices remained steady from the previous day yesterday amid mostly unchanged fundamentals, the day-ahead prices averaging 199.30€/MWh in Germany, France, Belgium and the Netherlands, -3.10€/MWh day-on-day with a strong coupling between the countries.
The power curve prices extended gains along the curve and for once especially on the back end, lifted by a combined rise of carbon and coal prices buoying the all energy complex. The German and French front calendar contracts indeed closed respectively 7.54€/MWh and 11.02€/MWh higher from the previous day.
The carbon market finally showed some activity yesterday with prices jumping out of their recent narrow trading range to post an impressive 9.5% daily gain. The steep surge however appeared to be mainly technical and fueled by the Dec.22 benchmark contract breaking several resistances, triggering stop losses along its way. Some market participants also pointed to the lack of auction yesterday pushing late compliance players to turn to the secondary market ahead of the deadline coming next week, although we are strongly doubting this potential supportive factor as nearly all operators should have completed the purchases for their 2021 emissions by now.
But the turmoil was also on the policy side of the EU ETS, with the European Parliament’s industry committee (ITRE) voting on the ETS reforms and CBAM, although the impact on the EUA prices should be neutral as the texts are only opinion reports which will now be sent to the ENVI committee. Meanwhile, the Commission also announced yesterday working on a possible increase of the EU renewable energy target to 45% by 2030 instead of the current proposed goal of a 40% share.