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This newsletter was published 18.11.2020 at 19:02pm CEST.
The current prices on the European carbon market are as follows:
EUAs see further gains as prices make the biggest run up since June. The optimism from last week continued with a good start on Monday. Positive vaccine development news pushed prices up by more than 4%. The price move measured the lows two weeks ago to Monday’s highs extended around 19%. Prices have come down from the highs since but are still holding up well above 50- and 200-day moving averages. Market strength has been surprising and brought back the possibility of highs of the year being reached in the next month. Surprisingly the options market activity has not followed the price move. Instead, call open interest for December 2020 expiry has decreased by almost 5 million EUA, while put open interest has increased by almost 7 million EUA. This trend in options open interest has been observed for a few months now. However, while 2020 call open interest keep falling, December 2021 has been rising steadily and has increased by around 12 million EUA in the same period. This suggests that participants do not expect any bigger moves up this year, rather they are more optimistic for next year.
German power prices are up 0.65 EUR/MWh since last week, with the front year contract trading at 39.05 EUR/MWh. API2 coal prices are up 2.5 USD/tonne since last week, with the Cal21 contract trading at 55.50 USD/tonne. EUR/USD is up 60 points since last week and is currently trading at 1.1770.
Price development of EUA Dec2020 futures contract