Weekly energy market update:
The market price volatility increased vs the last week on the back of the war tension between Ukraine and Russia. The risk that the gas supply to Europe can be disrupted boosted European power prices to historically high levels this week. However, from the weather side, we do not see any strong signs of a cold spell, so the main driver is geopolitical rather than fundamentals. That said, if the situation in Ukraine softens, we could see a bearish trend reversal again.
Meanwhile, for the next Week 5, the outlook remains bullish based on technical signals and higher gas prices. German Cal23 forward contract is expected to trade close to 146 €/MWh with a possible breakout above this technical resistance level.
To read the prior week’s energy market report, please visit the article here.