European carbon prices climbed back from intraday lows to end flat, closing above key technical support levels for a second day.
Front-year EU Allowance futures on ICE closed at their session high of €4.83, climbing back from a one-month low of €4.70 hit several times in afternoon trade.
Turnover was light at 10.5 million units, with a further 3.8 million tonnes changing hands down the rest of the ICE curve, including a notably high 1.5 million done on the Apr-16 futures.
The Dec-16 contract again showed technical weakness throughout the day by falling several times below the lower limit of both its recently-formed ‘pennant’ formation and its Bollinger Band, levels both around €4.81.
Observers said closing below these levels could trigger further losses and push prices back towards their two-year lows of €4.62 touched twice in February.
“Prices again moved lower and larger falls appeared to be on the cards but late afternoon buying, albeit in small volume, fuelled a recovery into the close. We have seen the same pattern over the last four days trading,” said Redshaw Advisors.
Earlier in the day, the UK sold 3.49 million spot allowances for €4.73 each, in an auction that cleared 3 cents below the secondary market and attracted bids worth a total 5.14 million units from 15 participants.
That was the fewest bidders seen in a UK auction since late January.
Carbon managed to rebuff a lower energy complex, with both Brent and WTI crude oil down more than $1 by the close of the EUA market.
German Cal-17 and 18 baseload power shed around 1% each, as did European coal on ICE.
These factors combined to slightly dent German clean dark spreads, though they remained above last week’s levels.
“Prices look set to drift into the Easter break. [ICE] is closed for trading on Friday and Monday so it is unlikely any material positions are taken tomorrow ahead of the shutdown,” Redshaw Advisors said.
“However, watch for a small blip upwards caused by those getting short today buying back before the four-day break.”
By Mike Szabo – firstname.lastname@example.org