EUAs edged up on slightly bullish gas market

The European power spot prices slightly increased yesterday as the forecasts of higher power demand and dropping solar generation offset the expectations of stronger wind output and improved French nuclear availability. The day-ahead prices averaged 199.30€/MWh in Germany, France, Belgium and the Netherlands, +10.85€/MWh day-on-day, but should fade today due to the rising renewable generation and French nuclear availability expected tomorrow.

The carbon prices posted timid gains with thin exchanged volumes on Monday, buoyed by a slight rise of gas prices. The EUA Dec.21 contract climbed near 60€/t in the first hours of trading as the gas market was lifted by an unexpected drop in Russian flows through Mallnow. Failing to break above its resistance and pressured by a weak auction result, the emissions prices however quickly corrected and hovered around 59€/t for the remainder of the day, the bellwether contract eventually closing at 58.99€/t, +72-cent from Friday’s settlement but just below its long-term uptrend. The bullish line, which has been supporting the EUA Dec.21 since November 2020 before the contract dropped below last week, is now likely to materialize as a resistance but should rise above 60€/t by the end of the week, hence limiting the impact on the EUAs.

Strengthened by the bullish gas market and early upward move of emissions, the power prices extended moderate gains along the curve over the first session of the week.