Berenberg sees carbon, gas and power reset

VERBUND AG

04/03/2024 11:03

** Berenberg says that the point where gas, carbon and power
are trading below par has been reached, and expects all three
commodities to recover to some degree
    ** Lower gas, carbon and power prices affect the outlook for
power generation, it says, cutting its carbon and power price
forecasts to reflect weaker market fundamentals and, therefore,
healthier market liquidity  
    ** Prices are expected to remain subdued with a potentially
wide trading range for the next few years before tighter
conditions lead to higher prices towards the end of the decade,
the broker says
    ** Berenberg expects liquidity to remain in the black for
the rest of the decade, and from 2027 a far tighter market than
experienced to date 
    ** From 2025 onwards, the broker's gas price forecasts are
unchanged at 29 euros/MWh
    ** It sees carbon prices averaging 58 euros/t in 2024 (with
a wide trading range), and 63 euros/t for 2025-26, and from 2027
sees a steady rise in the carbon price towards 130 euros/t 
    ** Berenberg downgrades Fortum  FORTUM.HE  to "hold" from
"buy"; cuts PT by 26% to 11.50 euros, citing the Finnish
utility's high exposure to power prices 
    ** It retains "buy" on RWE  RWEG.DE , SSE  SSE.L , and Engie
 ENGIE.PA  and "hold" on Centrica  CNA.L , Iberdrola  IBE.MC ,
and Verbund  VERB.VI  


 (Reporting by Marta Frąckowiak)
 ((marta.frackowiak@thomsonreuters.com))