Weekly Energy Market Update:
The market price remains very volatile and unpredictable. Although there was a market price correction since Jan’22, power prices remain historically high. The main reasons are:
- The low supplies of Russian gas to Europe
- The weak nuclear output in France this winter
- The ban of Indonesian coal exports & increasing price of CO2
Further spikes in European power prices can materialize on the back of cold weather spells and the deteriorating situation in Ukraine. However, we are more than halfway through the winter season when gas demand reaches its peak. Therefore, it’s still expected that market price relaxation in Europe can come after the end of the winter season sometime in Apr’22 – June’22.
For the next Week 4, our outlook is sideways bullish based on technical signals as well as strong oil, coal prices. German Cal23 forward contract is expected to trade upwards towards 140 – 145 EUR/MWh, followed after by a bearish correction in case no significant events occur in the meantime.
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