There is as yet no question of a break in the trend, but the fall in the price of agricultural diesel is striking. Since June, the price has remained virtually unchanged at about 90 cents per litre.
Today (September 4) agricultural diesel with an LTO member benefit costs €0,87 per liter (excluding VAT). Demand is declining, but it is not clear why. Except that the course of the corona crisis continues to be the most important price-determining factor in the energy market.
Gas and electricity rising
At the same time as the slightly lower oil price, it is becoming increasingly clear that the gas price has reached a structurally higher level than last summer. The approaching winter season naturally plays a role in this, but the increasing production of solar and wind energy is also an important factor. The supply is growing faster month on month, thanks to the rapidly increasing capacity.
In addition to the fast-growing production capacity, the renewable energy market is also characterized by a highly variable supply. The past few weeks have been extreme, due to the peak due to the summer storm on Wednesday, August 26. To buffer the strongly fluctuating supply of these renewable forms of energy, gas is needed (from which electricity is produced). Deferred maintenance on pipelines and nuclear power stations also plays a role in the gas market.
speculative character
No extreme weather is expected in the coming weeks. Large fluctuations in the production of solar and wind energy are therefore not obvious, although the weather conditions have been highly variable in recent days. It looks like the changeable weather will continue.
The combination of falling oil prices and rising gas and electricity prices is unusual. The energy market is therefore currently highly speculative, according to analysts. Constantly fueled by the ongoing uncertainty of the corona crisis, but also the political entanglements on the world stage, such as the approaching US elections and the possible annexation of Belarus by Russia.
CO2 rights €40?
The price of CO2 rights continues to rise unabated. Trading in emission rights is becoming increasingly important for the agricultural sector. This week the Council for the Environment and Infrastructure published a report about stopping subsidence in peat meadow areas, in which compensation for CO2 rights plays an important role.
Research by Wageningen Economic Research shows that a price of at least €40 is needed to offer farmers, who rehydrate their land and thereby build up CO2 rights, a cost-effective revenue model. At the moment CO2 rights cost about €30. During the low point of the corona crisis this spring, the price dropped to €15 per right.
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