European energy prices surge as Nordic power futures hit a two-and-a-half-year high

(1) Driven by a sharp rise in European natural gas prices, Nordic quarterly baseload power futures surged by 5.2%, reaching 103.3 euros/MWh, marking a new high since January 2023. (2) The European benchmark German annual power contract also rose by 2.3%, significantly lifting the overall energy price center. (3) British and Dutch natural gas prices soared, with UK gas prices hitting a three-and-a-half-year intraday high; geopolitical tensions between the US and Iran have disrupted regional LNG supply expectations. (4) Nordic hydropower inventories remain below average levels, and weak hydropower replenishment further supports strong regional power prices. (5) European carbon prices edged up slightly, with the entire energy sector showing coordinated price increases.