During the first week of February, the market remained positive and consolidated the price gains of January. DEC23 EUAs gained +4.55%. The permit reached new highs since the end of August during the session on Wednesday, February 1st, with the front-year contract reaching 97.55 €/t in the late morning. The first part of the week pushed prices higher and gave them acceleration, while on Thursday and Friday EUAs ‘relaxed’ with two slightly bearish sessions, however, still maintaining the previous price gains. During that week, EUAs consolidated largely above 90 €/t, failing to decrease below 93 €, which now appeared to be some sort of psychological support. There were no real resistances for the front-year contract, although the historical highs slightly below 100 €/t remained a key threshold to monitor.
During the second week of February, the market remained cautious and closed practically unchanged from Friday, February 3rd, with -0.28% on a weekly basis. EUAs were looking for direction and maybe waiting to retake the bullish trend seen at the beginning of the month. EUA DEC23 prices balanced around 90 €/t, designing a trading range which was 4.24 € wide. At the beginning of the week, some ground was lost, and during Tuesday, February 7th, and Wednesday, February 8th, EUAs bounced on the level of 89.18 €/t. The permit then recovered, and on Friday, February 10th, EUAs struck over 2 € of appreciation, reaching highs at 93.42 €/t.
The period 13th-17th was still positive for EUAs, which gained 3.46% from Friday, February 10th. Prices obtained a bullish acceleration right in the middle of the week and reached the highs at 98.45 €/ton during Friday’s session, only to lose some of this acceleration towards the end of the afternoon. However, the front-year contract consolidated well above 95 €/t, in a territory that seemed to be pushing towards the 100 €/t threshold. This was for sure a first psychological resistance area above which front-year prices had always failed to push themselves. The first important support was far, at 90 €/t, a level that sustained prices during the month of February.
During the last week of the month, new historical highs were seen for EUAs: never before had a front-year contract surpassed the 100 €/t threshold, and with a peak at 101.25 €/t last Tuesday, the DEC23 had succeeded. On a weekly basis, prices rose ‘only’ 1.18%, but this goal was an important signal for the market. After such a flare, the exchange registered a physiological retracement during the session of February 21st. However, EUAs found a support area around 96 €/t (surpassed on the 16th and onto which they have bounced ever since) and restarted a more cautious but consistent bullish movement reaching and again surpassing 100 €/t on Friday, February 24th. The new price record represented a resistance for prices, while the main support area, as previously mentioned, was around 96 €/t.
Francesco Rogato
With his commodity trading experience, specializing in the energy sector, and extensive knowledge of European exchange platforms and Over-The-Counter markets, he brings his advanced analytical view on the EU ETS carbon market in a monthly short blog, “Let’s Talk Carbon”.