European carbon prices hit a fresh three-year high early on Thursday, but ended flat despite an EU auction that cleared well above market and sent a bullish signal to the market.

Front-year EUA futures trading on ICE climbed to €8.51, a daily gain of 8 cents, before sliding back to settle down a cent at €8.43.

Volume was moderate at 12 million units traded.

A group of 25 EU member states sold 2.918 million spot EUAs for €8.46 each, a cent above the Dec-15 futures and 3 cents above the secondary spot price at 0900 GMT, the time the auction’s bidding window closed.

The sale attracted total bids from 17 participants that were equivalent to 6.9 million units.

Another bullish signal for carbon came from higher German dark spreads, which ticked higher to return to levels seen on Monday, mainly due to higher power prices.

The Dec-15s’ RSI topped the 65-mark earlier in the day, approaching the 70-level that can indicate an instrument is overbought, while the MACD was at a 1.5-month high.

By Ben Garside – ben@carbon-pulse.com