Profit taking pushed EUAs back towards 78€/t

The power spot prices rose for today in northwestern Europe, supported by forecasts low temperatures, low French nuclear availability and weak wind production. The day-ahead prices averaged 263.68€/MWh in Germany, France, Belgium and the Netherlands, +43.54€/MWh from Friday but -8.27€/MWh week-on-week.

The EUAs finally broke above 80€/t and hit another fresh record at the market open on Friday, before profit-taking drove the prices back down throughout the remainder of the day. The carbon prices reversed after the German auction cleared with a significant 45-cent premium to the secondary market, but the upward move was only short-lived and the emissions gave back all the gains later in the afternoon. The EUA Dec.21 eventually closed at 78.25€/t, -1.61€/t from Thursday’s settlement but +5.47€/t (+7.52%) week-on-week. With the 80€/t target now reached, several market participants are doubting the remaining upward potential of the carbon prices for the end of the year, pointing to the much lower open interest of options between 80 and 100€/t and the lack of fundamental behind November’s rally. On the other hand, a significant correction could also be out of the picture due to the support from the looming options’ expiry and EUA end-of-year auction break.

The power forward prices posted moderate gains along the curve on Friday, lifted by a timid rise of gas prices and the mid-day rebound of emissions.