There is a lot of movement in the energy market. The price of renewable electricity is expected to remain at the higher level of recent weeks for longer, but the biggest price increase in oil is probably over.
This week, the price of oil rose to nearly $50 dollars a barrel. Agricultural diesel (excluding VAT and including members' discount) also became slightly more expensive and now costs more than €0,90 per litre.
The organization of oil-producing countries OPEC announced that it would limit the planned easing of production quotas in January. In the months that follow, OPEC will review monthly whether the production restriction, which was introduced this spring due to the corona crisis, can be further relaxed.
Vaccination Program
Due to the second wave of corona and the lack of a short-term solution, OPEC is not confident that oil demand will quickly return to pre-corona levels. Despite the rapidly approaching vaccination campaigns. The speed with which vaccination campaigns are rolled out worldwide and their effectiveness will determine how quickly the oil market can return to a picture similar to the situation before the oil crisis. Taking all the factors into consideration, insiders conclude that new price increases such as the past few weeks are not obvious. By limiting the previously planned production increase, OPEC wants to prevent further price falls.
Light winter bad weather
On the other hand, the stretch for the positive price development of sustainable electricity is not yet over. This week the daily price reached an even higher peak than last week, again due to calm and gloomy weather. It has now also become clear that the supply of sustainable electricity from Denmark has come to a standstill due to a failure in the supply system. The disappointing supply of French nuclear power plants also plays an important role. It is becoming increasingly clear that the market for renewable electricity is mainly dependent on wind forecasts at this time of year. In the coming weeks, the high pressure influence, which caused a long period with little wind (also above sea), will disappear. Low pressure areas over Western Europe set the tone. But it is not expected that there will be as much wind every day as in October.
The temperature in the coming weeks will probably be slightly below average for the time of year. Prolonged freezing weather is certainly not on the agenda. Maybe some night frost and some sleet. During the day temperatures rise on average to about 5 degrees. Due to this temperature forecast, the demand for gas is increasing slightly. Last week the gas price fell slightly, after the price had piggybacked on the rapidly rising oil price since mid-November.
CO2 rights less cheap
CO2 rights were worth €30 again this week for the first time in a long time. Analysts have no clear explanation for the rising price of emission allowances. As a result of the corona crisis, there was a downward trend this year, which is at odds with the long-term outlook, which takes into account a much higher price, so that a good revenue model is created for CO2 sequestration and reduction.
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