EUAs recouped recent gains on renewed gas supply concerns

Despite higher gas prices and decreasing temperatures, most European power spot prices faded yesterday on forecasts of surging wind production. The day-ahead prices averaged 254.32€/MWh in Germany, France, Belgium and the Netherlands, -16.83€/MWh day-on-day.

The carbon market suffered once again from its negative correlation with the energy complex yesterday. The EUAs indeed tumbled by nearly 6% in the morning as gas prices surged on news that Germany triggered the first stage (out of three) of its Gas Emergency Plan following the EU refusal to pay its Russian gas imports in rubles. The emissions prices however slightly recovered in the afternoon and the EUA Dec.22 eventually closed at 78.31€/t, -3.39€/t from Tuesday’s settlement. The EUAs are rebounding this morning, taking again an opposite direction from the retracing gas prices as Russia seems to be stepping back on its demand to switch to Ruble for gas payments, and we could see prices rise back towards 80€/t if the positive sentiment takes hold.

In the power forward market, prices unsurprisingly tracked the bullish gas contracts on the above-mentioned German announcement, posting hefty gains along the curve.

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