Recently, we have been observing quite significant declines in gas prices, both in the US and in Europe. On the other hand, coal prices moved higher, mainly in Asia. Coal prices are rising due to increased demand related to the winter period. Should winter strike Asia, a similar situation is very likely to occur in Europe, which could also increase the upward pressure on coal prices.
On the other hand, if the attack of winter does not occur, just like last year, current trends in the energy market indicate that CO2 prices may face some downward pressure. The range of a possible correction could reach EUR 77-70 area.
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Coal prices in Asia are clearly rising, which should also affect European prices. Source: Bloomberg
Gas prices in Europe and the US are trading under pressure. Gas is twice less emissive than coal, so again energy producers are switching to less emissive energy sources. Source: Bloomberg
EMISS prices rebounded slightly, but are consolidating in a triangle formation. If gas prices continue to fall, then larger correction of EMISS price may occur. Nevertheless, the long-term upward trend should not be disturbed, and the level of EUR 100 per contract is the next target for buyers. Source: xStation5
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