Euro Markets: EUAs almost unchanged as activity slows ahead of Wednesday options expiry
European carbon prices ended Monday virtually unchanged after largely rangebound trading, as the imminent expiry of March options contracts continued to focus the market around the leading strike prices, while natural gas recovered from early losses amid renewed efforts at reaching a ceasefire agreement in Ukraine.
Read MoreAnalysts cast doubt on likelihood of rapid progress in potential UK-EU market linking talks
Political announcements on the possibility of negotiations between the UK and Europe over linking their carbon markets have triggered significant price volatility in UKAs in the last two weeks, but analysts have cast doubt over the likelihood of meaningful talks leading to an agreement in the near term.
Read MoreEuro Markets: EUAs slide as early boost gives way to profit-taking, while UKAs briefly hit nine-month high
European carbon prices ended Friday with a 0.5% weekly gain, after having opened sharply higher as energy prices also jumped on reports of an attack on infrastructure at the Sudzha gas transmission facility in western Russia, before falling back amid steady selling for much of the day, while UKAs briefly touched a nine-month high after yet another update that the UK government was considering linking to the EU ETS.
Read MoreEuro Markets: EUAs ease lower amid profit-taking and consolidation, with selling interest seen rising
European carbon prices handed back some of Wednesday’s 3% gain on Thursday amid what some sources said was profit taking, magnified by the weakest auction of the year to date, while energy markets also drifted on further reports that Germany and France are seeking to relax gas storage mandates from 2026.
Read MoreUKA futures prices to end 2024 up 23% year-on-year, ahead of anticipated shortfall -analysts
UK carbon prices are likely to end the year around 23% higher when the current front-December contract expires on Dec. 15, but are expected to advance more strongly in 2026 as the market surplus turns in to a shortfall, analysts told a webinar on Wednesday.
Read MoreEuro Markets: Geopolitics drives gains across energy, EUAs get further push from options hedging
European carbon prices surged to their highest in nearly three weeks on Wednesday as markets reacted to Russia’s refusal to agree an unconditional ceasefire in Ukraine, and energy prices posted sharp gains as traders priced in a lower probability of pipeline gas supplies resuming in the near term, with EUAs getting additional support from options hedging.
Read MoreEuro Markets: EUAs post late rally amid another headline surge in UKAs, as markets await news on Ukraine ceasefire
European carbon prices moved in a comparatively narrow range for much of Tuesday, before rising steeply in the wake of another UKA rally fuelled by headlines and as the effect of March options open interest continued to grow, while energy markets waited for the outcome of talks between the US and Russian leaders over a potential ceasefire agreement in Ukraine.
Read MoreEuro Markets: EUAs drift lower amid steady selling despite pull of March options
European carbon allowance prices began the week on a quiet note, with trade volume and volatility somewhat diminished compared to recent weeks, as the looming March options contract expiry continued to keep prices within range of key strike price levels at €70-€75.
Read MoreEuro Markets: EUAs post first weekly rise since January as options hedging, technical buying drive gains
European carbon prices snapped a run of five weekly losses on Friday, as a lacklustre start to the day gave way to a sharp rally amid a surge of technical buying and options hedging, with prices being pulled back up towards key strike prices for the March options contract.
Read MoreEuro Markets: EUAs extend gains on March option hedging before gas plunge trims day’s advance
European carbon resumed its close correlation to natural gas price movements on Thursday, as prices advanced to an eight-day high amid sustained early strength in April TTF gas and helped by robust demand from March options hedging, before news headlines in mid-afternoon triggered a massive sell-off in gas that pulled EUAs down from their highs.
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