Market Outlook

After the falling electricity prices in the spring, there were already signs in the June Summer Market Outlook that slightly bullish tendencies were emerging again. These are currently strengthening, not least due to the war in the Middle East.

October 2023

The front-year product on the power market, Base 2024, initially experienced a strong downward movement this year, trading down to values of around 115 EUR/MWh by the beginning of June. At the beginning of the summer, prices rose again as a result of warm temperatures, dry periods in many European regions and low gas deliveries - but from then on remained in a range mostly well below 150 EUR/MWh. This range was also supported by high feed-in values from renewable energies in some cases.  

However, the situation changed with the Hamas attack on Israel and the leak in the gas pipeline between Finland and Estonia - uncertainty in the market increased across the entire commodity complex. Conflicts in the Middle East, with high crude oil inventories there, are putting transportation routes at risk, and a spread of the conflict could have serious consequences for oil supplies. In particular, Iran's threat to block the important Strait of Hormuz caused unrest. About 20% of the world's crude oil is transported via this route. In addition to oil prices, gas and CO2 quotations also rose.

As a result, Cal 24 in the power market reached its current high of EUR 139/MWh in mid-October.



In the electricity market, the fundamentals paint a mixed picture: Following the attack on a hospital in the Gaza Strip, there are growing fears that the situation will deteriorate. This is countered by the above-average feed-in of renewables and signs of rather mild weather in the coming months.

There are also opposing trends in the gas market: The Middle East conflict with all its dangers has a bullish effect, while the filled gas storage facilities and mild weather prospects tend to dampen the trend.


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