EUROPE POWER-Forward curve drops on ceasefire deal
PARIS, April 8 (Reuters) - European forward prices fell sharply on Wednesday, tracking lower oil and gas prices after the United States and Iran agreed to a two-week ceasefire.
The deal was subject to Iran's agreement to pause its blockade of oil and gas supplies through the Strait of Hormuz, U.S. President Donald Trump said.
The waterway typically handles about a fifth of global oil shipments.
German year-ahead baseload TRDEBYc1 fell 5.9% to 88.60 euros per megawatt hour by 0942 GMT.
The equivalent French price was untraded.
However, price risks in the energy sector could start to build again over the next two weeks because there is a chance that passage into the Strait of Hormuz won't be allowed to rise to anything substantial, said Neil Crosby, assistant vice president of Oil Analytics at Sparta.
A ceasefire will deliver much-needed relief to economies battered by the world's worst energy crisis, but hopes that the truce will bring a swift return to normal oil and gas flows from the Middle East are almost certainly misplaced.
Carbon permits edged down 0.1% to 70.66 euros/MWh.
Spot prices fell on forecasts of rising German wind power supply on Thursday.
The German day-ahead contract TRDEBD1 was down 14.9% at 122.55 euros/MWh while the equivalent French contract TRFRBD1 dropped 19.7% to 47 euros/MWh.
Wind power supply is expected to increase by 7 gigawatts in Germany to 18.6 GW while French output is projected to dip by 220 megawatts to 3.1 GW, LSEG data shows.
Consumption in Germany is expected to rise by 520 megawatts to 55.7 GW. In France, it is forecast to fall by 1.6 GW to 46.6 GW.
French nuclear power availability rose three percentage points to 86% of total capacity. POWER/FR
