Carbon Weekly Newsletter

This newsletter was published 3.11.2021 at 16:08pm CEST

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

November started with increased intraday volatility. Daily trading range has exceeded 3 EUR mark on Monday, when EUAs sold off heavily. The reason behind one-sided move might be the news about Russian gas storage facilities. It was reported that underground reserves levels have been steadily rising above expectations and gas exports to Europe would likely follow sooner than anticipated. European storage levels have been flat in the meantime and are expected to rise after November 8, when Russian gas storages are likely to be set for the winter. On Tuesday, most losses have been recovered, however carbon prices are still staying below 60 EUR. The level has been acting as a strong psychological resistance for almost three weeks, with all daily closes below. Current options open interest of more than 34 million allowances at the level could be interpreted as another reason for shorter term consolidation in EUAs. Correlation between markets in European energy complex has come down in the past month, especially after spike in power prices. Since then, power has been trading in more defined price range, however, still well above 200 day moving average. Weather and energy consumption have been the main fundamental drivers of the market for the past months, and carbon is likely to remain trading in a range between 55 and 60 EUR, until major fundamental reason sends prices in either direction.

German power prices are down by 4.62 EUR since last week, with the front year contract trading at 116.75 EUR/MWh. API2 coal prices are down by 6.00 USD since last week, with the Cal22 contract trading at 113.50 USD/tonne. EUR/USD is down by 45 points since last week and is currently trading at 1.1575.

Price development of EUA Dec2021 futures contract

 

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