EUAs extended sharp uptrend on continuous buying and firmer energy complex

The European power spot prices are mixed for today, from 84.68€/MWh in Germany due to pressure from the country’s surging wind output, to 205.50€/MWh in France with support from the falling nuclear availability despite a weaker demand expected today.

The carbon prices continued to climb and hit a fresh record high at 97.50€/t on Friday as further buying strengthened the bullish momentum of emissions while the bullish gas and oil markets provided additional support. The EUA Dec.22 closed at 96.45€/t, +1.64€/t from Thursday’s settlement and marking a significant 8.10% weekly gain. Opinions are however diverging on the players behind the sharp uptrend seen last week, some participants attributing it to (cautious) compliance buying from industrials ahead of the approaching compliance deadline, while others are pointing to financial players attempting to reach 100€/t. The options open interest tend to support the second opinion as the 100€/t-strike calls continued to observe the largest open interest which actually increased last week. The emissions prices are retreating this morning, likely pressured by the fading gas prices and increased auction volumes scheduled this week, but it might be only a consolidation before another attempt at the 100€/t level.

Meanwhile the European power forward prices tracked the bullish gas and emissions markets and posted gains along the curve over the last session of the week.