EMM Week 33

European and global energy commodity markets had another bearish week, with falling oil prices on the driving seat once again. Prompted by downbeat economic outlooks and a stronger dollar, global crude prices extended their bear run and dropped to levels almost 20% below the records hit during July. European coal prices took direction from the slump on the oil markets, lower freight rates and from the traditional low August demand levels in Europe. Prompt gas and power markets looked fairly depressed on good availabilities and low demand levels typical of the holiday period. The bearish sentiment was also present in the gas and power forward markets, which appeared to track oil. European carbon allowances were the odd ones out last week, as prices moved seemingly against all fundamental indications. The benchmark 2008 contract gained some ground on a combination of technical trading and a bullish sentiment attributed by some to news that the EU will establish a formal link between the UN’s ITL and its CITL before November this year.