German Power Extends Slump on Milder Weather, Lower Gas Prices

(Bloomberg) -- German power for January is down by more than a quarter this week as milder weather set to cut demand at the start of the year while gas prices continues to fall. 

Contract for next month, quarter and year in Europe’s biggest power market continued to fall in the second day of trading after the Christmas holiday as milder weather forecast prevails across the continent and benchmark gas contract had its longest losing streak in more than a year. 

With gas storage levels still very low and a quarter of the French nuclear fleet still offline, warmer-than-normal weather is keeping prices at bay from the record levels seen earlier in December. 

“Given the mild forecast throughout continental Europe, energy demand remains relatively weak,” weather firm Maxar said in emailed forecast. 

German power for January lost as much as 3.3% to 255 euros per megawatt-hour, while benchmark contract for next year slipped 0.5 % to 219.60 euros on EEX exchange. Nordic front quarter dropped 4% to lowest since Dec. 13 at 111 euros on Nasdaq Commodities.   

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