A return of the carbon market’s speculators ?

The European power spot prices climbed above 220€/MWh for today, supported by a combination of decreasing temperatures, dropping wind output and much weaker nuclear availability with the French production expected to fall near 30GW and the Belgian reactor Tihange 1 shut for maintenance since last Friday. The day-ahead prices hence averaged 222.46€/MWh in Germany, France, Belgium and the Netherlands, +41.47€/MWh from Friday and +99.67€/MWh week-on-week as last Monday’s demand was strongly curbed by the public holiday.

The power curve prices were mixed for the last session of the week, a large share tracking the fading gas prices while other, mostly long term-prices and especially in France, were driven up by rising concerns over the nuclear situation following French nuclear regulator announcing late on Thursday that recent tests were expected to confirm that the recent stress corrosion recently affecting EDF largest nuclear units are also impacting the French utility 900MW reactors, largely widening the issue since this type is the most widespread in the country’s fleet.

The carbon prices rose again on Friday, getting near 90€/t with support from sustained speculative and technical buying despite an absence of change in the uncertainties over the Ukraine conflict outcome and the lingering expectations of demand destruction resulting from the crisis and high energy prices. Several participants suggested that investors might back after leaving the market nearly 7 weeks ago when the Russian military forces entered Ukraine and the whole energy complex went into crisis mode, but the limited exchanged volumes could point to a fragile buying interest and the EUAs are likely to face strong resistances before climbing back to their all-time high reached early-February. The EUA Dec.22 closed the week at 88.99€/t, +2.55€/t from Thursday’s settlement and +9.02€/t (+11%) from the previous week’s close, but is correcting this morning, likely driven down by a bearish sentiment from the oil and financial markets amid renewed concerns over the Chinese covid situation and bleak U.S. economic outlook.