EUAs traded flat as participants continued to look for directions

Although still largely uncoupled, the power spot prices rebounded yesterday amid forecasts of declining wind and solar output offsetting the expectations of weaker power demand for today and the fading clean gas costs. The German day-ahead prices climbed back above 100€/MWh to reach 108.98€/MWh (+35.82€/MWh day-on-day) while the contracts averaged 152.88€/MWh, +15.56€/MWh from the previous day.

The EUAs closed nearly flat from Wednesday’s settlement yesterday with a renewed volatility now that the front quarterly options has moved to the December contract. The carbon benchmark contract fell by 1,40€/t to the day’s low of 59.13€/t at the market open, a downward move mostly attributed to the early drop of gas prices. Both markets however sharply recovered afterwards, and, after a late and slight retreat, the EUA Dec.21 eventually settled at 60.54€/t, only -6-cent day-on-day. This neutral close highlights the market participants’ uncertainty regarding where the market could go in the short, most of them waiting for a clear directional sign before taking a strong position.

The power curve prices mirrored their underlying gas contracts, opening low before rebounding throughout the remainder of the day. A late but rather significant drop however led to most of the front months contracts posting daily losses at the end of the session while further on the curve the power prices managed to close slightly above the previous day’s settlement.