EMM Week 34

It was a singular week for European and global energy commodity markets, with coal, gas, carbon and power trading decoupled from the declining oil prices. Global crude prices extended their bear run and dropped to levels 23% below the records hit during July, driven by downbeat economic outlooks, increasing signals of demand destruction worldwide and a stronger dollar. European coal prices registered the first weekly gain since mid July, taking direction from stronger freight rates and renewed tightness in the Pacific Basin. Forward gas contracts in Northern Europe posted across the curve gains, taking direction from the rebound in coal prices and ignoring the developments in the oil market. Prompt gas markets also looked fairly strong, following supply disruptions in the UK market. The North European power systems continued to look very healthy, keeping prompt power prices depressed, but forward prices firmed across the curves along with coal and gas. European carbon allowances also ignored fundamentals for a second consecutive week, seemingly taking direction from the increase in German power and disregarding the bearish signal of lower implied fuel switching prices.