European Power Heads for Most Expensive Year as Sanctions Bite
- German benchmark contract gains sixth day to year-high level
- EU sanctions against Russia hits supply of gas and coal
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German contract for next year, a benchmark for European power prices, rose in sixth consecutive sessions to the highest level this year with rising fuel cost as sanctions limit Russian energy supplies.
The contract is now trading at the highest level since the market expected a complete cut-off of Russian gas flows at the end of last year, while the underlying future for 2023 is at a record level. A very tight market situation is expected next year as Russia plans to halt gas flows to an increasing number of countries that refuse to pay in rubles, on top of a full import ban set for August of Russian coal by the European Union.