Continental Europe will probably be warmer than average for a third month in February as the milder counterpart of the polar vortex that gripped North America helps to extend a decline in power and gas prices.
Five of seven meteorologists expect most parts of Europe to be milder than normal next month, according to a Bloomberg survey. Europe and the U.S. are at opposite ends of an Atlantic low-pressure system bringing mild weather to the U.K., France and Germany, while plunging the U.S. into a deep freeze, said Deutscher Wetterdienst, Germany’s national weather forecaster.
“Europe and the U.S. are coupled right now,” Andreas Friedrich, meteorologist at DWD, said in a Jan. 29 telephone interview from Offenbach, near Frankfurt. Over the next two weeks, “we are seeing the mild end of the polar vortex that will bring back frosty temperatures to the U.S.”
Electricity prices in markets from France to Scandinavia touched record lows today after a mild start to the winter cut demand just as the region is emerging from its longest-ever recession. Natural-gas stocks are approaching the seasonal average after starting the winter at the lowest level in at least four years on Oct. 1.
Power for delivery in February in Germany, Europe’s biggest market, fell 12% this month to close at 36.70 euros ($50) a megawatt-hour, according to broker data compiled by Bloomberg. Natural gas for delivery next month in the U.K., the region’s largest market, reached a 16-month low of 61.1 pence a therm ($10 per million British thermal units) on ICE Futures Europe in London.
“Temperatures are dominating prices,” Ricardo Klimaschka, energy trader at Energieunion GmbH, said yesterday from Schwerin, Germany. Nordic and German power costs may decline further, he said, without being more specific.
“We just haven’t had a proper winter yet, and power for delivery in March could slide to 32.50 euros,” Frank Woskowski, a power trader at AVU AG fuer Versorgungsunternehmen, said by phone from Gevelsberg, Germany, today. German power for March dropped to a record 34.55 euros a megawatt-hour today, broker data show.