EUROPE POWER-German forward contracts reach over three-year highs on rising gas costs

By Reuters News

PARIS, Oct 23 (Reuters) - European forward power prices extended gains on Friday as concerns over protracted disruptions in the Middle East drove up gas costs. NG/EU

  • The German year-ahead baseload contract rose 2.9% to €153 ($171) per megawatt-hour at 0833 GMT, after reaching a high since June 2023 at €153.10/MWh earlier in the session, LSEG data showed

  • The equivalent French contract was untraded early, according to LSEG data

  • Traded German forward curve contracts were up across the board as low gas storage levels and rising prices continued to add pressure, with the November and January contracts going over €200/MWh

  • Renewed Houthi attacks on Saudi Arabia and shipping exacerbated fears that Middle Eastern LNG exports could remain severely disrupted for an extended period

  • This has driven up European gas costs, which puts bullish pressure on gas-dependent German electricity

  • Uncertainty is heavy ahead of winter, with gas storage levels at the lowest level measured at this time of the year in more than a decade, Mind Energy analysts said in a note

  • On the spot side, Monday contracts were untraded as renewable supply was expected to grow in Germany and drop in France

  • German wind and solar power supply was expected to rise by 2.4 gigawatts and 2.1 GW, respectively, lowering residual load in the country, LSEG data showed

  • French wind power supply was expected to drop, however, to 8.2 GW from 8.6 GW

  • French nuclear output rose one percentage point to 73% of total capacity. POWER/FR

($1 = 0.8935 euros)

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