EU carbon prices hit their highest level for six weeks early on Thursday but slipped throughout the session amid a lower energy complex.

The Dec-16 EUAs closed down 4 cents on ICE at €5.27 on thin turnover of 8.4 million.

The benchmark carbon contract hit €5.37 amid a buying spurt in the opening minutes, its highest since Feb. 23, but then drifted lower throughout the morning and spent the afternoon in a 5-cent range in shallow negative territory.

The intra-day peak broke a €5.35 technical ceiling that prices have repeatedly bumped up against over the past five sessions, but traders said the move had little bullish effect as selling pressures around that level remains strong.

“It looks like €5.35 still acts like a ceiling but because the next resistance level is close at €5.49, we would need to see the price above €5.49 in order to fully interpret it as a bullish sign,” one trader said.

Carbon fell as other key energy commodities were also weaker, led by a 2% drop in oil prices on data showing higher Iraqi exports.

The fall in energy products gave a slightly bullish signal for utilities. German clean dark spreads widened slightly as a drop in coal outweighed lower power prices.

There was little price movement around today’s spot EUA auction, which cleared 3 cents below market at €5.23, and with 2.25 bid coverage was just above the year’s average.

This is in contrast to Wednesday’s UK sale result, which was the weakest in over a year with a 10-cent discount to the secondary market and an oversubscription rate of just 1.19.

Nothing conclusive emerged from a morning meeting between German and French environment ministers, who exchanged views on EU ETS reforms but had no intention of taking any firm positions, a spokesman for the German ministry told Carbon Pulse.

By Ben Garside – ben@carbon-pulse.com