Uptick in gas prices after cold forecast

During the first week of the year, the overall power demand always tends to be relatively lower. At the beginning of the week, we still had an above-average amount of wind generation. Towards the end of the week, wind generation gradually decreased. Throughout the week the incoming weather runs indicated that temperatures for the next week and the week thereafter could significantly drop, especially in the second week, where temperatures could fall below freezing levels in Northwest-Europe. The weather forecasts were accompanied by a rise in gas prices, which had previously dropped towards 30 €/MWh in the weeks before. The day-ahead briefly traded above 35 €/MWh. Ultimately, gas contracts for the coming months closed about 2 euros higher. February closed at 34.6 and March at 34.5 €/MWh. The price differences between the gas contracts are increasingly disappearing and the forward curve is flattening.
In the Scandinavian countries, temperatures were already very low. The day-ahead price for Friday in the Baltic countries ended very high. In Estonia and Finland, the average price was 890 €/MWh. Power generation was very limited here, partly due to the decrease in wind generation and limited nuclear availability. In the Netherlands, the average spot price in the first week of 2024 was 69.2 €/MWh, almost 35 euros higher than the previous week’s average. CO2 prices decreased again after rising to around 80 €/EUA a week earlier. Last week, the December 2024 contract dropped by about 4 euros, reaching 76.3 €/EUA.
The clean spark spread for the coming months generally decreased. The clean spark for February remained the only positive contract for the upcoming months. It moved little last week and was 4.7 €/MWh. The spark spreads for March and April were -5 and -13 €/MWh, respectively.

The gas contract for 2025 increased by one euro to 35.8 €/MWh. The CO2 price for next year decreased by just over 4 euros and was 78.8 €/EUA. The Dutch power price for 2025 dropped by just under one euro to 93.4 €/MWh. The clean spark spread decreased by one and a half euros and remains negative at -3 €/MWh.