GLEG UK & European Energy Snapshot...
Daily (04.07.2024): Oil prices rose by over 1% on Wednesday amid surprise drop in US crude inventories and Fed rate cut optimism.
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Oil prices increased on Wednesday, benefiting from an unexpected drop in US crude inventories and heightened hopes of a rate cut by the US Fed. Hence, Brent crude stood at $87.34 a barrel, while WTI crude settled at $83.88 a barrel, with both contracts rising by 1.3% day-on-day.
British short-term gas prices dropped on Wednesday, with the NBP spot price ending at 76 p/therm, as improving wind power generation and falling demand dragged prices lower. On the forward curve, the gas price for Winter 2024 delivery declined by about 2%, settling slightly above 98 p/therm, weighed by stable LNG and robust gas storage.
European spot electricity prices plummeted on Wednesday, impacted by a sharp increase in wind power generation. The German spot power price plunged by 68% to settle at 28.10 EUR/MWh, while the French day-ahead contract collapsed by over 72% to finish at 10.53 EUR/MWh.
Along the forward curve, front-year electricity prices lost ground on Wednesday, tracking the downward trend seen on the gas market. The German Cal’25 power price retreated by 0.4% to stand at 93.40 EUR/MWh. The French Cal’25 power price declined by 1.4% to settle at 74.87 EUR/MWh.
European carbon allowances ended Wednesday with a marginal change following a highly volatile session marked by significant trading volume. The EUA rally post-daily auction seemed to be in response to a further rise in speculators' net short positions. Consequently, the EUA contract expiring in Dec-2024 added 0.1% at 70.76 EUR/tonne.
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