Power prices posted moderate gains on lower Russian gas supply

The European power spot prices remained stable and just below the clean gas costs yesterday as the expectations of lower demand were offset by forecasts of weaker renewable generation. The day-ahead prices hence averaged 227.67€/MWh in Germany, France, Belgium and the Netherlands, -5.85€/MWh day-on-day.

The power forward prices tracked the firmer gas and coal prices on Wednesday on lower Russian gas supply and posted moderate gains along the curve.

Meanwhile, the emissions observed a sharp bearish morning amid continuous low liquidity attributed to the Easter holiday, but steadied around 77.50€/t from mid-day and for the remainder of the sessions. The EUA Dec.22 closed the day at 77.44€/t, -1.57€/t from Tuesday’s settlement, and is slightly rebounding this morning, possibly supported by the negatively-correlated gas market opening lower. The carbon market sentiment however remains neutral due to a lack directional driver and the particularly slow activity marking this week.

The ICE’s Commitment of traders report published yesterday showed that the financial players continued to progressively build back their length last week, with the investment funds increasing their net long position by 1.91mt to 13.84mt. The investors’ position however remains far from the 35mt held early-February, highlighting the speculators reluctancy to invest massively in carbon allowances as they did earlier this year due to the lingering uncertainties over the crisis outcome and its long-term impact of the economy.

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