Month: March 2020

Dear Sirs and Madams,

There is certainly no lack of comments and assessments on the global corona crisis these days. In any case, it is a unique opportunity to observe how people react in crisis mode. Because all people are decision makers. Whether one has to make decisions for oneself, for a family, a company or a state. As the sometimes very controversial discussions show, it is of course anything but easy to make the right decisions and to foresee the consequences completely correctly.

Just how difficult this is can also be seen in the various markets. The oil price, for example, has so far lost almost 60 percent compared to the beginning of the crisis. Last night, the price fell once again, dropping to its 2002 low as the market was just processing the attack on the World Trade Centre. The trigger for the rather unexpected further drop in price could have been the renewed reversal in the assessment of the situation by US President Donald Trump, who suddenly spoke of a limit of 100,000 deaths being a success in the United States due to the virus. The fact that two major players in the oil market, Saudi Arabia and Russia, have apparently got caught up in a price war is also a burden.

The CO2 market, on the other hand, has been slightly optimistic in the past trading week. At the beginning of the week, the price of the December contract on the London ICE faced its lowest point since the beginning of the crisis at a nominal EUR 14.34, but during the week, it tendered up to EUR 17.80. This high volatility on a weekly basis still speaks for the uncertainty of many traders, but a factually correct decoupling from the oil price can also be seen.

(The average exchange quotes and OTC-prices shows the average between bids and ask of several exchanges and OTC markets for carbon emission rights in the ETS. Bid and ask has usually in Spot Market a visible spread. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into EUA. Crude Oil and Euro Currency shows day-end-exchange quotes. This market information has just an informational character and are no advice or offer to trade carbon emission rights or their futures and options. If you want to unsubscribe, please reply to this mail.)

Please call our international carbon desk if any further questions exist: +49.2831.1348220.

With kind regards,

Advantag Services GmbH

Dear Sir or Madam,

In the past few days, events in Europe and the rest of the world have developed with unprecedented dynamism in relation to the corona virus.

Apart from the effects on social life and health care, the economy in particular will suffer significantly from the events. But now not only large companies from the manufacturing or service sectors are affected, it will also burden small and medium-sized companies.

One only has to think of the restaurants, bars, retailers and handicraft businesses, which in many cases do not have sufficient liquidity reserves to survive a business shutdown even for a few weeks. Even if the German government and the EU want to take historic measures to contain the economic and financial crisis, many smaller companies will still be hard hit because aid loans will also have to be repaid.

Financial markets closed with a plus sign after last week’s crash last Friday, and the Nikkei in Tokyo posted only a slight loss. However, the nervousness is likely to result in further losses, which is not surprising given the dynamic developments at the political level.

To avoid Italian conditions, further cuts appear to be unavoidable in Germany from the current perspective, which should not lead to buyers returning to the financial markets.

While the CO2 emission rights had held up fairly well last week and survived the crash on the stock and energy markets with relatively moderate losses, they slumped by more than 8% on Monday morning at the start of trading. The further development in Europe will certainly remain the most important factor in the coming days and weeks.

The Advantag team will continue to be available for you as usual in the coming days.

(The average exchange quotes and OTC-prices shows the average between bids and ask of several exchanges and OTC markets for carbon emission rights in the ETS. Bid and ask has usually in Spot Market a visible spread. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into EUA. Crude Oil and Euro Currency shows day-end-exchange quotes. This market information has just an informational character and are no advice or offer to trade carbon emission rights or their futures and options. If you want to unsubscribe, please reply to this mail.)

Please call our international carbon desk if any further questions exist: +49.2831.1348220.

With kind regards,

Advantag Services GmbH

Dear Sir or Madam,

OPEC tried to cut production to stabilize prices at the end of last week, but failed in negotiations with Russia. Originally, the daily production limits were to be reduced by a further 1.5 million barrels.

The issue of the corona virus currently dominates the financial and raw materials markets clearly, which is why the oil cartel considered this measure to be necessary. From OPEC’s point of view, it made more sense to extract a little less oil, but to realize more yields due to the rising prices.

As of Friday, Brent Crude Oil lost a good $ 5.00 and further negative reports regarding the European corona virus over the weekend caused a veritable crash on the market this morning. The oil price declined a good 30% and was just in the low at just over USD 31.

The fact that the oil price repeats itself quickly depends not least on signals from Russia, whether they are still giving in to support market prices. Russia is by far the largest oil supplier for Germany.

The German DAX index also lost more than 7% in early trading, while gold and the euro, on the other hand, benefit from the current market situation.

The prices for European CO2 emission allowances also fell significantly this morning by more than 3%, which is, however, significantly less than could be expected in relation to the oil crash. With a current price of around EUR 22.50 per EUA, the price is not far from the 6-month low of EUR 22.26 on October 9, 2019.

In the coming days, the nervousness of the financial and commodity markets will remain price-setting due to the fear of a recession regarding emission rights.

(The average exchange quotes and OTC-prices shows the average between bids and ask of several exchanges and OTC markets for carbon emission rights in the ETS. Bid and ask has usually in Spot Market a visible spread. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into EUA. Crude Oil and Euro Currency shows day-end-exchange quotes. This market information has just an informational character and are no advice or offer to trade carbon emission rights or their futures and options. If you want to unsubscribe, please reply to this mail.)

Please call our international carbon desk if any further questions exist: +49.2831.1348220.

With kind regards,

Advantag Services GmbH

Dear Sir or Madam,

The general hysteria with regard to the corona virus has not only continued to affect the financial and raw material markets, but meanwhile also large parts of the country in Germany. Not only did the DAX dip to 11,725 ​​in the past week, numerous foods such as pasta, flour and yeast also disappeared from supermarket shelves in western Germany.

There are currently just under 90,000 registered infections worldwide, of which 80,000 are in China – a country with 1.4 billion inhabitants. In Germany there are not even 200 cases with 82 million inhabitants, but there are already end times in many of them – the market reactions and the run to the supermarkets cannot be explained otherwise.

From a pragmatic point of view, however, two points can be made: on the one hand, it is an interesting test run to see how long a serious pandemic with a high mortality rate could be contained and, on the other hand, a stress test for banks and the economy.

At the moment, it appears that both the spread of Covod-19 and a little more reason seem to be returning to the markets, as the first counter-reaction appears to be emerging in the financial markets as well as in the commodity and energy markets.

This morning the EUAs can be seen above the 24 Euro mark again. If both Corona and the collective panic do not spread further, there would be a corresponding upward potential.

(The average exchange quotes and OTC-prices shows the average between bids and ask of several exchanges and OTC markets for carbon emission rights in the ETS. Bid and ask has usually in Spot Market a visible spread. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into EUA. Crude Oil and Euro Currency shows day-end-exchange quotes. This market information has just an informational character and are no advice or offer to trade carbon emission rights or their futures and options. If you want to unsubscribe, please reply to this mail.)

Please call our international carbon desk if any further questions exist: +49.2831.1348220.

With kind regards,

Advantag Services GmbH