EU Power

February 7, 2019

The Research Team reviews the EU Power market

 

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7 February 2019

  • Total production is predicted to fall from record levels (week 6) to average (or even below average) rates into week 7. A predicted drop in the wind output is primarily responsible for this, particularly during the second half of week 7. This tightness may extend into week 8 as well. Spot supply in western Europe is currently on the tight side and predicted to further tighten into week 7.
  • While an Arctic front will lead to a widespread drop in temperatures by the beginning of week 7, high pressure conditions are then forecast to amplify over northern Europe and Scandinavia. Temperatures should range from around to slightly below average for the next 5 to 10 days. While this will likely lead to an increase in demand relative to week 6, the departure from the long-term mean remains negligible or even slightly negative.
  • Macroeconomic conditions are showing counteracting signals. The latest PMI figures (Jan data) indicate a further drop which brings the index below the 50-threshold for the first time in three years. Industrial production (Q4) confirms this bad outlook, exhibiting the worst performance in 2018. However, freshest data on the chemical and cement segments (Jan’19) show potential signs of recovery.

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