This newsletter was published 9.8.2023 at 16:21pm CEST

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

Carbon experienced a sharp surge in prices today, just minutes after the release of weekly Commitment of Traders data. The report indicated a remarkable shift in the positions held by investment funds, transitioning from net long position of 11.6 million allowances last week, to net short position of 6.4 million EUAs today. The news sent prices to 85.82EUR per tonne, before reversing almost the whole move. This might seem unusual, since market usually overreacted and started trending at least for a day or two. Moreover, the move in EUAs was also accompanied by a strong move in gas and power prices, especially front month products. TTF futures contract for September 2023 rose more than 30 percent from the daily lows, while calendar rose by almost 10 percent in a day. The move might be caused by hotter weather forecast, and overall supply concerns. Such moves, especially in so important energy commodity have mostly been one-sided and have offered no pullbacks. Almost identical move happened in German power futures as well, indicating how much the European energy sector really relies on gas. Average trading volume in EUAs has been healthy in the past week and always breached 11 million tonnes on December-2023 futures contract, which may be good for price discovery and lower volatility.

German power prices are up by 4.30 EUR since last week, with the front year contract trading at 138.00 EUR/MWh. API2 coal prices are up by 12.50 USD since last week, with the Cal-24 contract trading at 130.00 USD/tonne. Front year gas prices are up by 3.100 EUR since last week, with the TTF Cal-24 trading at 52.400 EUR/MWh. EUR/USD is up by 50 points since last week and is currently trading 1.0980.

Price development of EUA Dec2023 futures contract