EUAs gave back early losses on retracing gas prices

The European power spot prices remained impressively flat from the previous day yesterday, with a continuous German wind shortage offset by a strong solar generation, fading power demand and improving Belgian nuclear availability. The day-ahead prices averaged 227.99€/MWh in Germany, France, Belgium and the Netherlands, -2.15€/MWh day-on-day.

The carbon prices traded sideways on Thursday, decreasing in the morning despite the daily auction clearing with a 27-cent premium from the secondary market before rebounding on its 50-day moving average and steeply rising over the afternoon with support from their negative correlation with the fading gas prices amid sustained comfortable LNG imports and easing impact of Russian gas supply halt to Poland and Bulgaria. Exchanged volumes were once again low with only 20.45mt changing hands through the Dec.22 contract, well below the 26.27mt year-to-date average. The EUA Dec22 closed at 82.68€/t, +1.67€/t from Wednesday’s settlement. The benchmark contract opened above its 5 and 100-day moving averaged this morning, which could point to some bullishness for the last session of the week fueled by the firming equity and oil prices on one side and retracing gas market on the other. Numerous participants however pointed to the lack of liquidity the carbon market has been facing for the past weeks inducing moves identified as “noise” rather than fundamentally or even speculatively based.

On the power forward side, prices were seen lower day-on-day at the end of the session, driven down by the gas market weakness for the above-mentioned reasons.