Gas price plummets after talks between Trump and Putin

Last week, the average Dutch spot price was 143.7 €/MWh. At the start of the week, wind generation was strong in both the Netherlands and Germany. However, from Wednesday onward, wind production dropped significantly, and solar generation remained limited. In France, temperatures stayed low, keeping power demand high. On both Thursday and Friday, a large number of power plants were needed to meet demand.

At the beginning of the week, gas prices continued their upward trend, with the March contract trading around 59 €/MWh on Monday. However, by the end of the workweek, it had fallen to 50 €/MWh. Several factors contributed to this decline. First, there was increasing alignment between weather models regarding temperature forecasts for weeks 8 and 9. While the first half of week 8 was expected to be colder—especially in Northwest Europe—temperatures were projected to rise sharply across Europe in the latter half of the week. Additionally, U.S. President Trump announced that he had spoken with both Russia and Ukraine, and that both countries were open to negotiations on potentially ending the war. Lastly, reports indicated that the German government had requested the EU to ease its gas storage level targets. According to Reuters, sources suggested that the current goal of filling gas storage facilities to at least 90% by November creates excessive buying pressure, pushing prices higher. By the end of the week, Dutch gas storage levels were around 30% full, while German storage levels were nearing 40%.

CO2 prices fell by 2.5 euros, dropping below 80 €/EUA, with the December contract closing at 79.8 €/EUA. Coal prices also declined by approximately 6 euros, with the March contract falling to 94.8 €/Ton. Dutch power contracts for the coming months fell by 7 to 8 euros, with March closing at 99.3 €/MWh and April at 88.6 €/MWh. Clean spark spreads for the coming months improved by 2 to 4 euros, while dark spreads worsened slightly. However, dark spreads remain significantly less negative than before.