EUAs climb to record settlement despite bearish opening

The power spot prices were mixed in northwestern Europe yesterday, slightly up in France and the Netherlands, but down in Germany and Belgium amid rising temperatures and surging wind output. The day-ahead prices reached 189.17€/MWh in the four countries, -7.25€/MWh with prices ranging from 91.00€/MWh in Germany to 280.10€/MWh in France.

The carbon prices started Tuesday on bearish tone, dropping as low as 73.12€/t in the first hour of trading. The weakness was however very short-lived, the EUAs quickly reversing and steadily rising throughout the remainder of the day with support from early gains in the gas market and a bullish revision of weather forecasts, ignoring the retreating gas prices in the afternoon. The looming annual carbon allowances auction break may have provided additional support to the market as participants starts to stock up allowances in anticipation of the lower supply at the end of the year. Some participants were also seen rolling position to the Dec.22 contract due to the near expiry of the Dec.21. The EUA Dec.21 eventually settled at record close of 75.37€/t, +1.16€/t day-on-day, and already hit a fresh intraday all-time high at 75.92€/t this morning.

The power forward traded sideways on Tuesday, driven by the sharp variations of gas prices. Marked by sharp gains at the opening and a significant retreat at the end of the session, the power prices nonetheless managed to post slight gains along the curve from the previous day.

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