Wet weather forecasts result in steep price fall

Focus week 38: Wetter weather forecasts caused Nordic energy prices to fall at the start of week 38. The market is keeping an eye on whether hydro-power producers will have to increase production and lower prices again.

Here and now

Following minor price climbs during the previous week, last week saw very steep price falls in the Nordic energy market. When the weather forecasts became wetter during the weekend, the market reacted by way of a notable downward adjustment on Monday. The water levels in Norwegian water reservoirs are extremely high, and there are concerns that increased inflow of water could force hydro-power producers to lower prices again. However, we are unlikely to return to the levels from July and August. Following the price falls, the Q4-20 and YR-21 contracts closed the week at EUR 24.90/MWh and EUR 25.19/MWh respectively.

Read Focus here.