Brent, fuels and CO2
The price of Brent oil futures for November on the ICE market remained between $55.93/bbl and $61.32 during August, settling on August 7 at $55.93, the lowest price this year. Throughout August the market was conditioned by factors that caused fluctuations: production cuts by OPEC+ nations, a decrease in U.S. crude oil inventories and a global economic slowdown caused by the China-U.S. trade war.
TTF gas futures on the ICE market for next month settled between €14.33/MWh and €12.80 during the month and continue at two‑year historical lows. During the first 13 days of August they oscillated around €14/MWh but, as of August 14 the price began to fall, settling on August 27 at €11.95, the lowest price traded in the last two years. That figure, however, was surpassed by a settling price of €11.85/MWh on Monday, September 2.
API 2 coal futures prices on the ICE market for October began on Tuesday, August 1 with a settling price of $60.75/t and were subsequently traded down for most of the month to hit $53.70/t on Wednesday, August 28, the lowest price quoted this year. The monthly average of the settling price for August was down 6% on July.
CO2 emission rights futures prices on the EEX market for December were traded in August between €25.08/t and €29.45/t, settling on Friday 23 at €25.08. The product experienced downward pressure, having reached record highs in July due to the prospects of a hard Brexit and the trade dispute between the United States and China.
European electricity markets
In the main European electricity markets, prices fell during August compared to July, due to a decrease in demand caused by the holiday period. The price reductions were between 13% on the MIBEL market in Spain and Portugal and 5.2% on the IPEX market in Italy. The exception was the Nord Pool market of the Nordic countries which registered an increase of 2.7% in August, from July. That increase caused the Nord Pool to cease being the market with the lowest price in Europe during August, with a monthly average of €36.11/MWh, positioning it above the EPEX SPOT market in France, which had a €33.39 average.
The fall in price in the European electricity markets during August followed the same trend as CO2 emission rights, which fell 3.6% compared to the average price seen in July.
By an annual comparison, a completely different situation was observed in the trends, making price falls in all markets much more noticeable. The price decreases were between 27% for the IPEX market in Italy and 44% on the EPEX SPOT market in Belgium, justified by a change in trend of gas and coal price scenarios, which were on the rise last year towards the maximums recorded in September, while in 2019 the trend has been downward, with several historical lows in recent months.
Coinciding with the fall in fuel prices, wind energy production in August was clearly higher than in August last year for France, Portugal and Italy. In Germany and Spain it fell below the production of August 2018.
Regarding the average price level last month, the EPEX SPOT markets were around €36/MWh, the Nord Pool stood at €36.11, the British N2EX closed with an average price of €41.70, the MIBEL market in Spain and Portugal obtained an average of €44.96 and the IPEX market in Italy obtained the highest of the main European markets, with €49.54/MWh.
The prices of European electricity futures traded on August 30 fell unanimously compared to the first day of the month, both for the fourth quarter of 2019 and for 2020. For the next quarter, the outstanding decreases occurred in the markets of the United Kingdom and the Nordic countries. In the case of the United Kingdom, the decreases were 11% and 9.8% on the ICE and NASDAQ, respectively. In the case of the Nordic countries there were decreases of 9.6% on the ICE and 9.7 % on the EEX.
For next year’s session, there was a most notable decline in the U.K. markets, where an 8.1% fall was reached on the ICE and 8.4% on the EEX.
Wind and solar energy production
For August, wind energy production increased, year‑on‑year, in France – to extend a streak that began five months ago – with growth of 17% compared to August 2018. Similarly, in Portugal there was a year‑on‑year increase in August of 8.9%, maintaining the trend for the fifth consecutive month.
In Italy, wind energy production had year‑on‑year growth of 11% in August. Germany and Spain, however, saw decreases of 4% and 12%, respectively. Those events led to a 2% year‑on‑year decline in Europe.
Solar energy production – PV and solar thermal – enjoyed a recovery last month for the main European producers, obtaining year‑on‑year growth of 6%. Individually, the increases were 1.8%, 9.2% and 15%, in Germany, Italy and Spain, respectively.