EU Market: EUAs snub firmer oil, power to post small dip

Published 18:20 on April 20, 2016  /  Last updated at 18:20 on April 20, 2016  /  EMEA, EU ETS  /  No Comments

EU carbon prices eased slightly on Wednesday, staying within a narrow trading range and ignoring firmer crude oil and German power prices.

EU carbon prices eased slightly on Wednesday, staying within a narrow trading range and ignoring firmer crude oil and German power prices.

Front-year EU Allowance futures trading on ICE settled down 2 cents at €5.55, near the top of their €5.45-5.56 trading range, with volume healthy at 11.2 million units changing hands.

A further 3.7 million were bought and sold along the rest of EUA futures curve, with around 1.3 million of that done as block trades.

“Today’s trading pattern was the same as yesterday with falls in the morning before buying through the day clawed back losses,” said Tom Lord of Redshaw Advisors.

“The carbon buying increased as oil made a break higher. With little or no direction from power, coal or the euro, the outlook remains unchanged.”

Bellwether Brent crude prices were up $1.40 to $45.43/barrel at the time of writing, rising on the back of smaller-than-expected gains in US inventories and reports that oil-producing nations could meet again in Russia next month following their failed attempt to freeze output at last Sunday’s summit in Doha.

Meanwhile, German baseload power prices nudged higher, while European coal and the euro dipped slightly.

Combined, this exerted slight downward pressure on German clean dark spreads, which have also remained in a relatively narrow range so far this week.

Earlier on Wednesday, the UK sold 3.49 million spot EUAs in an auction that cleared in line with the secondary market and attracted 14 bidders who collectively submitted bids totalling 6.66 million tonnes.

The sale’s oversubscription rate, at 1.91, was the highest for a UK auction since early March.

By Mike Szabo – mike@carbon-pulse.com

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