EU carbon prices were little changed amid thin, calm trade on Thursday despite a government auction that attracted the highest bid coverage for two weeks.
The benchmark Dec-15 EUAs settled up 1 cent at €8.12 on ICE after moving in a razor-thin €8.12-8.16 trading range on turnover of 7 million units.
Today’s EU auction of 2.9 million spot EUAs cleared on par with secondary prompt prices at €8.11, with a bid-to-cover ratio of 4.13, the highest since Poland’s allowance auction on Sep. 23.
“Looks like the market is confused and waiting for a clear direction. Tomorrow we might see some more activity as traders might want to close their positions before the weekend,” said one dealer.
He pegged the next resistance level at €8.27, echoing the views of some analysts. Prices have tried to penetrate the €8.24-8.27 level seven times since Sep. 15, with Wednesday’s intraday peak the latest attempt.
Carbon slipped 11 cents late yesterday on technical selling and profit-taking throughout the energy sector. This was despite a sharp rise in German clean dark spreads, which one trader flagged as providing a bullish stimulus to carbon prices early today.
The spreads eased back slightly on Thursday as lower German power prices were offset by drops in ARA coal prices.
By Ben Garside – firstname.lastname@example.org