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NORDIC – Futures follow Germany higher on colder weather

(Montel) Nordic power futures traded higher on Monday morning in the wake of gains in the German market amid colder weather forecasts.

The Nordic front-month contract last traded up EUR 1.10 to EUR 21/MWh, while the front-quarter contract rose EUR 0.4 to EUR 18.95/MWh. The front-year contract last traded EUR 0.37 higher at EUR 16.90/MWh on the Nasdaq Commodities exchange in a sluggish market.

“The weather input is rather neutral or somewhat bearish compared to before the weekend. However, we see prices rise in Germany due to a colder weather outlook from Friday and the Nordic market follows suit,” said senior analyst Sigbjørn Seland at StormGeo.

The German front-month contract jumped EUR 3.08 to EUR 48.60/MWh while the front-quarter contract last traded EUR 1.52 higher to EUR 46.80/MWh on the EEX exchange.

A low wind power outlook towards the end of the year would also boost German spot prices and support the Nordic market, Seland added.

Weather forecasts indicated 6.6-9.3 TWh of potential hydropower production from rain and snow in the Nordic region over the next 10 days, compared with a norm of 7.5 TWh. Temperatures were expected to slide from 5 degrees above the norm in the current session to the norm of -1.8C on Friday, according to Energy Quantified (EQ), a Montel company.

Despite sliding temperatures towards the end of the week, consumption was expected to drop from an average of 49.8 GW in the current session to 45 GW on Thursday due to the Christmas holiday, according to EQ.

Close to delivery, the day-ahead contract was last quoted in a bid-ask range of EUR 13.5-15.25/MWh, compared with the current session’s system price of EUR 16.62/MWh.

Nordic wind power generation was expected to remain nearly unchanged from an average of 9.8 GW in the current session to 9-10 GW on Tuesday, according to EQ.

The Dec 21 EUA carbon contract last traded at EUR 30.33/t, down EUR 0.81, while the January gas contract last traded up EUR 0.43 to EUR 16.33/MWh on the Dutch TTF hub.

Reporting by:
Gert Ove Mollestad
11:24, Monday, 21 December 2020