EUAs gave back gains after hitting a fresh intraday record

If the power spot prices rose by 16.33€/MWh on average in France, Belgium and the Netherlands to 225.64€/MWh amid expectations of stronger power consumption and early gains in gas and carbon prices, the price German price dropped by 40.70€/MWh to 139.90€/MWh as the country’s wind generation is forecasted to surge up to 33GW today.

After slightly retreating in the morning, the EUAs set a new intraday record for the sixth consecutive session at 68.45€/t, but gave back all the gains at the end of the day as the gas prices dropped after Germany’s grid operator reassured the market by stating gas supply and flexibility were sufficient to meet peak demand over the upcoming winter months. The EUA eventually Dec.21 closed at 67.16€/t, -39-cent from Tuesday’s settlement.

Technical indicators are pointing to a still strong upward momentum for emissions while bullish traders seemed to aim at the 70€/t level, but EUAs will likely need support from the gas market (despite their recently weaker correlation) to reach this target, and a strong retreat of gas prices amid lower supply concerns could conversely trigger some profit taking in the EU ETS.

Despite a late reversal alongside the gas and carbon markets, the power forward managed to post large gains along the curve, especially the short-term contracts. The late losses of the energy complex is however likely appear today on the curve.