Nordic power forward prices fall as lower European gas prices and expectations of wet weather exert pressure

⑴ Nordic power forward contract prices retreated on Thursday after reaching their highest level since January 2023 in the previous trading session. Declining European natural gas prices and the outlook for wet weather have pressured the Nordic power market, which relies on hydropower.⑵ The region’s nearby quarterly base load power contract fell by €0.81 to €98 per megawatt-hour, while the contract for the following year dropped by €0.35 to €60.25 per megawatt-hour.⑶ Analysts pointed out that benchmark wholesale gas prices in the Netherlands and the UK declined as participants took profits at recent highs, and there was no reported escalation overnight in the US-Iran conflict, which contributed to the fall in Nordic power contracts.⑷ On the weather front, forecasts show that the Nordic region will be under the influence of low pressure systems for the next two weeks, with wet and cooler conditions, and frequent precipitation expected in Scandinavia and Finland. Regional hydropower reserves remain about 13.47 terawatt-hours below normal, virtually unchanged from the previous session.⑸ Germany’s day-ahead power prices declined due to increased wind power output, and Europe’s benchmark German power contract for the following year fell by €2.25 to €121.01 per megawatt-hour. In the carbon market, benchmark contracts edged down to €83.64 per ton.