Carbon Weekly Newsletter

This newsletter was published 29.5.2024 at 16:44pm CEST

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

EUAs fell by more than 4 EUR since last week, following an unsuccessful attempt to test the 80 EUR mark. The uptrend remains prevalent, with carbon typically finding support at levels aligned with technical indicators, such as 200-day moving average. Fundamentals remain stable and unchanged; however, there are rising concerns regarding Russian gas supply to Austria. This thesis could be confirmed by some analysts, who have reported the largest net long position in Dutch gas futures since January 2022, just before the conflict between Ukraine and Russia escalated. Despite the risks, the current balance in the European gas markets remains healthy. Relatively full underground storages could provide some resistance for front-month products, especially due to the pace of gas injections. According to the Aggregated Gas Storage Inventory, the storages remain more than 69 percent full and are consistently rising. It will be interesting to see how participants will start to behave when capacity reaches critical levels and what will happen to the positive correlations between the markets in the European energy complex. EUAs have been moving along with gas for quite some time, which has ultimately resulted in a slashed net short position held by investment funds. According to the CoT report, investment funds now hold only a 6.7 million net short position, down from nearly 40 million tonnes in February. Although the reduction of more than 7.3 million tonnes is significant, it had little effect on the market. Long and short-position participants now hold similarly large exposure, which could provide stability to the market or, on the other hand, lead to fundamentals playing out.

German power prices are down by 2.29 EUR since last week, with the front year contract trading at 97.75 EUR/MWh. API2 coal prices are up by 0.60 USD since last week, with the Cal-25 contract trading at 121.00 USD/tonne. Front year gas prices are down by 0.750 EUR since last week, with the TTF Cal-25 trading at 37.850 EUR/MWh. EUR/USD is down by 20 points since last week and is currently trading 1.0815.

Price development of EUA Dec2024 futures contract


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