Carbon Weekly Newsletter

This newsletter was published 2.11.2022 at 16:07pm CEST

The current prices on the European carbon market are as follows:

After explosive move to the upside last week, EUAs finally breached 80 EUR level and traded as high as 82.58 EUR. Trend was mostly fuelled by strong participation on daily auctions, that usually cleared well above secondary market. The move occurred without any major pullbacks until sellers appeared near 200 day moving average, often referred to as long-term technical resistance. Since the local peak, prices reverted for a healthy 7 EUR. There could be several reasons for such retracement, but unusually warm weather for this time of year might be most obvious one. Natural gas demand in EU for October was well below 5-year average, which also helped driving energy and EUA prices lower. Underground storages are at the moment near 95 percent full, which is much more than early November last year, while trend of flows keeps climbing up. Other markets in European energy complex have been flat or slightly bearish, as a direct result of lower gas prices. The only exception along EUA is crude oil which traded higher in the past few days, due to firm demand. Although energy markets seem relatively calm, they trade at massive discount compared to prices from a few months back. Considering 2023 is less than a couple of months away, it should not come as a surprise if volatility picks up as we approach year end.

German power prices are down by 3.00 EUR since last week, with the front year contract trading at 372.00 EUR/MWh. API2 coal prices are down by 10.00 USD since last week, with the Cal23 contract trading at 211.00 USD/tonne. EUR/USD is down by 200 points since last week and is currently trading 0.9870.

Price development of EUA Dec2022 futures contract


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