EU carbon prices barely reacted to the Parliament’s widely-anticipated approval of the MSR on Wednesday as traders withheld the temptation to book profits in hope of further gains in the coming days.
Dec-15 EUA futures closed down 1 cent at €7.46 on ICE after trading in a €7.44-7.56 on healthy volume of nearly 17 million units.
The benchmark front-year futures were trading at €7.52 in the minutes after the early afternoon MSR vote in the EU Parliament in Strasbourg, two cents below its level just before the ballot was cast.
MEPs approved the bill, sending the proposal to EU ministers for a final nod in September.
The endorsement had been widely anticipated but some market watchers had expected prices to dip slightly as traders looked to take profits by selling units they bought in the run-up.
“I was long, and actually I am still long,” said one trader. “I didn’t ‘sell the fact’ on the MSR vote because of Greece and that the (European Commission’s upcoming post-2020 ETS reform proposals) are due on 15 July.”
Europe’s climate commissioner Miguel Arias Canete had at one stage suggested that this new proposal could be delayed, but he gave further assurance it would come next week in a tweet after today’s vote.
In a debate earlier in the day, Greek PM Alexis Tsipras promised MEPs he would deliver detailed reform proposals by Thursday intended to secure the debt-ridden country another three-year loan from EU lenders.
This boosted optimism among financial markets that a deal could be struck this weekend that would keep Greece in the eurozone and spare markets from instability that could spread to carbon prices.
“I am expecting carbon to reach €7.64 soon, but everything depends on the Greeks,” the trader said, referring to the resistance level EUAs repeatedly hit late last month.
Earlier on Wednesday, the UK government sold 3.1 million spot EUAs for €7.45 each, some 2 cents below market, in an auction that attracted total bids worth 6.8 million units.
By Ben Garside – firstname.lastname@example.org