Euro 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.
Read MoreEuro Markets: “Rage against the machines” as headline triggers UKA spike and short squeeze in EUAs
EU carbon prices ended Wednesday in the grip of a major price spike, as a news report reiterating that UK-EU market linking was under “serious consideration” caused UKA prices to leap as much as 11%, and triggered a rally in EUAs which in turn led traders to squeeze short positions held by algorithmic traders.
Read MoreEuro Markets: EUAs stabilise after early weakness as energy markets recover losses ahead of COT data
EU carbon prices halted two days of gains on Tuesday, giving up an early advance and falling through technical supports after a weak auction in the morning, as selling picked up amid a darkening macroeconomic mood and ahead of Wednesday’s weekly positions data that was expected to show a sharp fall in long positions.
Read MoreEuro Markets: EUAs follow gas higher before trimming gains amid growing macroeconomic gloom
European carbon prices advanced strongly with natural gas on Monday, after a weekend attack on Ukraine by Russian forces using a gas pipeline indicated that shipments from Russia would not resume in the near term, before giving up some of their gains as US markets opened weaker amid an increasingly gloomy macroeconomic outlook.
Read MoreEuro Markets: EUAs suffer whiplash amid constant flow of headlines to post fifth weekly loss in a row
EU carbon prices posted their fifth weekly loss in a row despite a energy-wide rally on Friday morning, as traders reacted to overnight reports that Russian forces had attacked energy infrastructure in Ukraine, followed by whiplash volatility late in the day after US threats to impose sanctions and tariffs on Russia were followed by reports that Russia is open to a ceasefire.
Read MoreUPDATE – Tumbling EUA prices may reflect future supply fears, but analysts see buying opportunity
The recent steep drop in EU carbon prices represents a buying opportunity, analysts said Thursday, as the future supply risks that have emerged recently are seen as unlikely to significantly alter the market shortages expected over the next two years.
Read MoreEuro Markets: Carbon sets another year-to-date low as front-month gas plunges 12% in two days
EU carbon prices resumed their downward momentum on Thursday, falling to a new year-to-date low amid steady selling as natural gas prices continued to fall, as traders began to consider where the market might find a floor, and to try to guess how large the speculative liquidations have been, that may be reflected in next week’s positioning data.
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