Energy Market

After conflicts in the Middle East and Russia pushed refining margins to a record high and affected gas stations, Julius Baer bank reveals a surprising forecast regarding the future of fuel prices in the near term.

Despite the drop in oil imports and severe damage to the Strait of Hormuz following the war in the Middle East, Beijing managed to add barrels to its national inventory. This is the strategic planning that calmed the markets and fears of the next price spike.

The Electricity Authority and the Noga company are publishing a hearing for a new pricing method for private electricity producers. The tariff will rise, alongside a reduction in compensation and payments they currently receive. The rationale: increasing certainty that will allow for an increase in production capacity in the medium and long term. The implications in the short term: a possible...

Gas reserves in Europe are less full than usual, imports from the Middle East are limited, and prices remain high. However, Norbert Rücker of Julius Bär argues that the fear of a crisis stems mainly from the trauma of 2022 and the chance of a significant shortage is lower.

The Electricity Authority signals that institutional entities will receive more lenient treatment regarding concentration issues in the electricity sector, even when they hold a series of production and storage assets. Electricity Authority: "There is no impediment to approving the allocation of rights to the Phoenix group based on considerations of economy-wide concentration."

The government company TAA, the largest shareholder in the Dorad power plant, is challenging the Electricity Authority's decision to block the expansion of the facility by 670 megawatts.

The 4.45 billion shekel acquisition of Shikun & Binui Energy by PowerGen has triggered regulatory scrutiny over market concentration. As electricity demand surges, the industry faces pressure to restructure ownership.

Generation Capital has signed an agreement to acquire the energy arm of Shikun & Binui for 4.45 billion shekels. To secure regulatory approval, the parties have outlined a contingency plan involving asset swaps in power plants, including the Sharon region project, with the participation of Nofar Energy.

The Generation fund is nearing the acquisition of Shikun & Binui Energy for 4.2 billion shekels, after the parties reached understandings on the compensation mechanism in case the deal is not completed. Now the parties are preparing to finalize the last agreements and have the merger examined by regulators, who are concerned about the concentration in the electricity production sector.

Julius Baer estimates that the surge in oil prices is mainly due to geopolitical tensions, but believes it is a temporary move on the path to resuming negotiations, rather than a crisis that will spiral out of control.