EEX cautions against interference with market forces as energy price soar

European Energy Exchange AG

04/04/2022 15:11

FRANKFURT, April 4 (Reuters) - The European Energy Exchange
 DB1Gn.DE  on Monday cautioned against policymakers interfering
in the price setting role of energy bourses as Russia's invasion
of Ukraine plays havoc with European fuel markets.
    Amid soaring gas prices, the European Commission has to
reconcile calls for joint gas buying, storage and retail pricing
strategies with the need to safeguard the liberalised and
competitive state of the market and the functioning of demand
and supply signals. urn:newsml:reuters.com:*:nL2N2VX1L6
    Proposals to interfere with the price formation process, as
currently put forward by some European Union member states,
should be treated with the "highest caution", the EEX, part of
Deutsche Boerse, said in a communication reflecting discussions
in its council for rules and regulations.
    The executive of the EU bloc is working closely with member
states to prepare for any gas shortages after Germany and
Austria declared an "early warning" following policymakers'
rejection of Moscow's demand that foreign buyers pay with
roubles.
     "Shutting down exchanges, limiting certain trading
strategies or capping wholesale market prices would not change
the market’s valuation of the underlying commodity," said the
EEX.
    "If market price formation at exchanges was restricted,
market participants would move away from transparent trading
venues to unsecured and non-transparent ways of trading," it
added.
    No EU country has yet raised an alarm it is facing a supply
emergency.  urn:newsml:reuters.com:*:nL2N2VX2N0  
    EEX also said that as a consequence of the volatile market
environment in power and gas, trade margins that must be
deposited with its clearing house, ECC, have increased
significantly, which poses a challenge for trading
participants. urn:newsml:reuters.com:*:nL1N2TR1GO urn:newsml:reuters.com:*:nL1N2TR1GO
    In light of the situation, the ECC was allowing carbon
emissions allowances (EUAs) as collateral for margin
requirements, and had reduced minimum holding periods before
deposited EUAs become eligible as margin credits, it said.
    

 (Reporting by Vera Eckert, editing by Kirsten Donovan)
 ((vera.eckert@thomsonreuters.com; +49 30 2201 33654;
@EckertVera;))