European carbon prices gained for a second straight day to return to €6 and extend its distance from the previous session’s three-week low of €5.65.

The Dec-16s settled up 12 cents at €6.02 on ICE, near the top of the day’s €5.81-6.04 range, in fairly thin turnover of 11.9 million.

Trade was bolstered by a relatively hefty 9 million along the rest of the curve, with 7.4 million done as a block on the Dec-17 futures.

The benchmark contract also managed to hold above both its 100-day moving average at around €5.90 and its 20-day moving average and middle Bollinger Band at €5.96, providing a short-term bullish signal for the market.

Front-year carbon only briefly dipped below the €5.84 mark technical resistance that was breached on Tuesday, with the level likely turning back into support.

The signal from the energy complex was fairly muted despite Brent oil prices climbing 3% to $47.32 a barrel amid a drop in US supplies added to concerns about Nigerian output as Shell announced a pipeline closure.

The effect of oil-led gains in coal was lessened by a stronger euro and a slight rise in baseload German power, which limited losses in the German dark spreads to just a few cents.

Meanwhile, prices were little changed around the government auction, which saw EU nations sell 683,500 EUAAs at €5.72, a 13-cent discount to the benchmark front-year EUA futures.

That was close to the 14-cent discount recorded in the previous EUAA sale on April 13. Bid coverage was slightly higher at 4.59, compared to 3.92 in last month’s sale of the less liquid aviation-only units.

By Ben Garside – ben@carbon-pulse.com