Electricity prices in Europe drop in milder, windier weather

Electricity prices for the coming month in Europe fell this week after weather forecasts signaled warmer-than-usual and windier weather conditions to prevail in northwestern Europe in the weeks to come. future.

The price of electricity for February in Germany, which serves as a benchmark for Europe, fell nearly 10% this week, according to estimates by Bloomberg.

However, electricity prices for the coming year in Germany have jumped by the same percentage this week, suggesting that electricity prices in Europe will continue to be high even a year from now.

Short-term prices have come down as the latest weather models show warmer temperatures and more wind for wind power production.

Nonetheless, European natural gas and electricity prices picked up in 2022 where they left off in 2021, amid roller coaster volatility.

Friday, Europe and UK gas prices have fallen the arrivals of LNG cargoes largely offsetting the persistent weakness of gas supplies from Russia.

After a drop in benchmark gas prices in Europe after Christmas due to the high number of LNG shipments en route, the new year has started with a further surge in prices as gas deliveries from Russia via Ukraine and Poland continue to be weak as another cold snap has crept in. in Europe.

Natural gas prices at Dutch hub TTF, the benchmark for European gas, rose 6% at midday on Wednesday, after jumping 30% on Tuesday. Early Thursday gas prices in Europe and the UK continued to increase in cold weather and low Russian supply.

“The European energy crisis shows no sign of a solution with the gas management and electricity prices remaining at the mercy of meteorological developments, the level of Russian supplies as well as the pace of LNG shipments reaching Europe”, Ole Hansen, Head of Commodity Strategy at Saxo Bank, noted on Friday in a weekly commodity overview.

By Tsvetana Paraskova for Oil Octobers

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