EUROPE POWER-Curve up with firm gas response to Russia/Ukraine


featured_image_126European power forwards on Monday traded higher in reflection of firmer gas prices, which responded to the unresolved row between Europe’s main gas supplier Russia and transit country Ukraine over unpaid bills.

“Clearly the uncertainties must be priced into power but don’t forget that prices had been low, so this morning’s advances are not surprising,” a curve trader said.

The German Cal 2015 baseload power contract for next-year delivery was up 63 cents from Friday levels at 34.83 euros ($47.4) per megawatt-hour, a near seven-week high after 34.95 euros on April 30.

The bid-ask range of the equivalent French contract was 42.13 euros, up 12 cents from Friday.

After unsuccessful weekend discussions in the long-standing row, Russia’s Gazprom said Ukraine had failed to pay at least part of its gas debts by a 0600 GMT deadline and would now have to pay up front for deliveries, suggesting that supplies could be cut.

Generators factor in prices of gas and coal as they show the cost of feedstock for thermal power, and also carbon emissions rights which are levied on burning fuels for electricity.

via EUROPE POWER-Curve up with firm gas response to Russia/Ukraine | Energy & Oil | Reuters.