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Gas to benefit from higher EU power and carbon prices

The recent surge in EU carbon prices, coupled with higher year-on-year power prices, will likely benefit gas if the trend continues The recent surge in EU carbon prices, coupled with higher year-on-year power prices, will likely benefit gas if the trend continues.
By Andreas Walstad 12 April 2019 Europe & Russia / Global Markets 0 34132
Traders at ETX Capital London. (European Commission)

Directional impact on forecast:
Bullish for continental hub prices

Generators using nuclear power, hydropower and renewables are the obvious winners from the recent surge in the price of EU carbon allowances (EUAs), but gas may also benefit if the trend continues.

Prices for EUAs have risen sharply since the beginning of the month, in line with stronger power and fuel prices and amid an easing of fears over a hard Brexit.

The benchmark December 2019 contract for EUAs traded above €27 per...