German 2014 Power Rises From Record Low as Carbon Permits ClimbRachel Morison
German electricity for delivery in 2014 advanced for the first time in eight days as European Union carbon permit prices rose. February power in France and Germany fell to a record.
Baseload German 2014 electricity, for supplies delivered around the clock, added as much as 0.6 percent after earlier dropping to an all-time low, while carbon permits gained as much as 5.1 percent. Power can track fuel and emissions prices, which affect the cost of production at plants that burn fossil fuels.
The power contract rose as much as 25 cents to 44 euros ($58.74) a megawatt-hour and was at 43.90 euros at 5:12 p.m. in Berlin, according to broker data compiled by Bloomberg. EU carbon permits for December added as much as 30 cents to 6.20 euros a metric ton on the ICE Futures Europe exchange in London.
Price swings in the benchmark next-year German contract, as measured by 30-day historical volatility, rose to 10.971, the highest since Aug. 1, according to broker data on Bloomberg.
“There has been a pick-up in implied volatility on the annual contracts, after a long period of weakness,” Guy Wolf, a strategist at Marex Spectron Group Ltd., a commodities broker in London, said in an e-mailed report. “We expect 2013 to be the year in which volatility returns to financial markets.”
French 2014 power retreated 0.1 percent to a record 46.35 euros a megawatt-hour, broker data showed.
Baseload February electricity in France and Germany, Europe’s two biggest power users, also dropped to all-time lows. The German contract fell as much as 2.1 percent to 47.50 euros, the lowest since the contract began trading in October. The equivalent French contract slid as much as 1.9 percent to 53.95 euros, the lowest since it started trading in November.