European carbon dithered on low volume in a 10-cent range on Thursday to end a cent higher, as participants pulled back following yesterday’s MSR vote.

Front-year EU Allowance futures closed at €7.47 on volume of just over 6 million units traded on ICE, while some 1.3 million units changed hands across ICE’s time spreads.

The Dec-15 contract hit a session high of €7.54 before sliding back.

“After yesterday, there’s not so much life in this market.  Traders are now waiting for the ETS review while keeping an eye on Greece,” one trader said.

The European Parliament on Wednesday passed by a comfortable margin a bill to introduce the MSR to regulate allowance supply in the ETS.  All eyes now turn to the European Commission, which is due to publish on July 15 its proposals to reform the ETS after 2020.

“Some speculators are using the whole Greek situation as an excuse to drive the market lower, but there aren’t too many fundamental reasons why prices should come off the €7.50 level,” the trader added.

Analysts last month said further deterioration of Greece’s debt crisis could inject some volatility into the EU carbon market, but a so-called Grexit was seen as having little impact longer-term on EUA prices.

Carbon failed to follow the rest of the energy complex higher, as UK gas, German baseload power and API2 coal were all up modestly.

Clean German dark spreads edged higher as a result, with the Cal-18s notching the biggest daily gains at more than 5%, giving a bullish signal to carbon.

“We might see a move to the upside soon as the lows carbon is setting are higher than previous ones,” the trader said, adding that he sees the next technical resistance levels around €7.64 and €7.70.

No CERs traded on ICE on Thursday.

By Mike Szabo – mike@carbon-pulse.com