EUAs broke above technical resistance in another quiet session

Except in Germany where prices inched up on forecasts of weaker wind output, the power spot prices faded in northwestern Europe yesterday amid expectations of slightly lower power demand. The day-ahead contracts averaged 229.73€/MWh, -11.08€/MWh day-on-day.

The EUAs finally climbed above their 100-day moving average resistance yesterday in a moderately bullish session attributed to another strong auction result, option trading ahead of the quarterly contracts’ expiry next Wednesday and some compliance buying. The carbon prices observed a similar pattern than the previous days, fading ahead of the daily auction before rebounding for the remainder of the day, yesterday’s sale clearing with a significant 20-cent premium to the secondary market spot price and impressive 2.7 cover ratio. The large open interest of the 80€/t-strike call options is also expected to act as a magnet until next week’s expiry, although the benchmark contract failed once again to settle above that level despite several tests during the session. Several traders also pointed to the slow activity of the market, especially in the morning, with very low volumes available. The EUA Dec.22 eventually closed at 79.89€/t, +1.73€/t from Wednesday’s settlement. Prices are now expected to remain close the 80€/t level until the option expiry, so the market’s volatility should remain low in the next sessions if, of course, there is no noticeable developments in the Russia-Ukraine negotiations.

The power prices notched timid gains along the curve on Thursday, supported by early gains in the gas market and firmer EUAs in the afternoon.

Energysac power news
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