Brent, fuels and CO2
In the last days of last week, the price of Brent oil futures for December on the ICE market ranged between $59.91/bbl on Thursday and $59.42/bbl on Wednesday and Friday, although on Thursday the price increased 0.8% compared to Wednesday. On Friday the price fell another 0.8%, recovering Wednesday’s value. This decline is related to global economic growth concerns, accentuated after data on China’s growth in the third quarter were made public and were lower than expected. At AleaSoft, it is expected that in the coming days the behaviour of the market will continue to be influenced by the economic outlook so prices should remain stable, with a tendency to fall.
TTF gas futures on the ICE market for November in the last days of last week began a downward trend although the overall behaviour of the week was very stable. On Thursday, the settling price was €16.03/MWh, 0.3% lower than on the previous day. On Friday, the price decreased 0.4% on Thursday and reached a value of €15.97/MWh. This price was the lowest of the week, 0.7% below the maximum price of the week of €16.07/MWh, recorded on Tuesday and Wednesday.
API 2 coal futures on the ICE market for November declined continuously last week. As a result, on Friday the settling price was $60.50/t. This value is 2.7% lower than that corresponding to the previous Friday, of $62.20/t, and is the second lowest value recorded so far this month, after the $60.40/t seen on Thursday, October 3.
CO2 emission rights futures on the EEX market for December began to decline at the end of last week. After the maximum value for the week – and month – of €26.31/t was reached on Wednesday; Thursday and Friday saw price reductions 1% and 0.7%, respectively, so the settling price on Friday was €25.87/t, 1.7% below the maximum price of last week but still 7.1% higher than the minimum price of the week – seen last Monday. The behaviour of this market during the past week was influenced by the Brexit negotiations, with rises the days before the agreement between the United Kingdom and the European Union was reached, after which it began to descend. At AleaSoft it is expected the market will continue to be strongly influenced by the Brexit negotiations this week. If the British parliament does not approve the agreement reached and there is an exit without agreement on October 31, the prices are expected to fall. If an agreement is approved, the prices could rise.
European electricity markets
The prices of most European electricity markets increased last week. The EPEX SPOT market in Germany, with a weekly average of €37.96/MWh, saw the largest increase, with a variation of 25% compared to the average price of the previous week. On the other hand, the prices of the MIBEL markets and the Nord Pool exchange in the Nordic countries decreased. The Nord Pool, with a weekly average of €36.83/MWh, regained its position as the market with the lowest prices of the analysed markets and presented a 1.4% drop compared to the average price of the previous week. In the case of the MIBEL market in Spain and Portugal, there were decreases of 5.9% and 5.6% respectively. The rest of the markets experienced increases of 14-18%.
The rise in prices in most markets was supported by a decrease in energy production from renewable sources. In Spain and Portugal, the decrease in the prices was favoured by the increase in wind energy production.
Electricity demand behaved differently in the analysed countries. The United Kingdom saw the greatest variation, with an increase of 5.5%, and Portugal saw the greatest decrease, with a drop in demand of 2.9%. The demand of the rest of the analysed countries varied between ‑0.8% and 2.1%.
The prices of most of the markets analysed for Monday rose compared to last Monday, with the exception of the IPEX market in Italy where they decreased by 16%, settling with a daily average of €51.17/MWh. The Iberian market of Spain and Portugal, with an increase of 28% compared to last Monday, positioned itself as the one with the highest price in Europe on Monday, with a daily average of €54.34/MWh. The Nord Pool saw the lowest price, closing at €39.31/MWh. The rest of the markets settled with prices between €43.44 and €44.65/MWh.
Electricity futures
The prices of electricity futures for the first quarter of 2020 fell for the Iberian peninsula. In OMIP, in Spain and Portugal, this product presented drops of 1% on Friday, compared to a week earlier. The price of Spain’s futures for the next quarter in the EEX market also fell, by 0.9%. Week‑on‑week price declines were also seen for Great Britain, in futures traded on the EEX market and on the ICE market, of 1.7% and 1.3%, respectively. The rest of the European futures markets recorded increases in the past week. The EEX market of France was the one with the smallest increase, of 0.2%. Meanwhile, the one with the greatest increase was the NASDAQ market of the Nordic countries, where the prices for the first quarter rose 1.7%.
Full-year 2020 electricity futures behaved similarly. On the OMIP and EEX they fell 0.4% and 0.6%, respectively. As in the quarterly futures, the price of Great Britain’s futures fell both on the EEX and ICE markets, by 1.7% and 1.3%, respectively. Contrary to the behaviour of the quarterly futures, the prices of Netherlands futures declined but the change between the Fridays of the previous two weeks was only €0.01/MWh. The rest of the markets did increase compared to Friday, October 11, from the €0.03/MWh rise on the Italian EEX market to the €0.29/MWh seen on the German EEX.
Wind and solar energy production
Wind energy production in Germany, France and Italy was much lower last week, with declines of up to 38% in Italy. On the contrary, on the Iberian peninsula wind energy production was 32% higher than in the previous week. AleaSoft expects a decrease in wind energy production in all the analysed countries this week.
Solar energy production in Spain, PV and solar thermal, decreased 28% last week. In Germany and Italy production also decreased, but to a lesser extent – 0.8% and 7.1%, respectively. At AleaSoft an increase in solar energy production in Spain and Germany is expected this week. In Italy, lower production is expected.
