19/12/2023

From October 30th to November 3rd, EUA prices sustained a negative trajectory, resulting in a 2.16% decline compared to Friday, October 27th. DEC23 prices exhibited a consistent downward trend over 15 sessions, reaching new yearly lows on October 2nd, falling below the previous February’s mark of 77.00 €/tonne to touch a low of 76.24 €/tonne. Having breached the psychological support of the year’s lows, EUAs proceeded to decrease further to 70.00 €/tonne, plunging into a void without substantial technical support until the 55.00 €/tonne range, observed immediately after Ukraine’s invasion.

During the 2nd week of November, EUAs demonstrated relative stability, with DEC23 prices remaining marginally weak, experiencing a decrease of less than 1%. The week commenced with a depreciation that led to new yearly lows at 74.84 €/tonne on Wednesday, 8th. However, within the same session, DEC23 EUAs rebounded, embarking on a three-day ascent that nullified previous losses, positioning themselves at levels similar to the beginning of November, around 78 €/tonne. Price climbs were reduced by the 200-day moving average at 78.77 €/tonne, emerging as the primary resistance.

The third week of the month witnessed a downturn, completely nullifying the earlier gains and causing DEC23 EUAs to decline by 2.73% compared to Friday, November 10th. The initial half of the week showcased a robust start for the front-year contract, reaching intra-day highs of 80.30 €/tonne on Wednesday, 15th, marking the highest price since October 20th. Subsequently, EUAs experienced a downturn, trading at a low of 75.87 €/tonne on Friday, November 17th.

From the 20th to the 24th of November, the market exhibited weakness, concluding the week with minimal change, up by only 0.07% from Friday, November 17th. Prices hit new yearly lows at 74.65 €/tonne on the 23rd but rebounded during the same trading day, recovering 3 € and returning above 77 €/tonne. The market remained indecisive, with a prevailing bearish trend. Throughout the sessions on the 20th, 23rd, and 24th, DEC23 EUAs struggled to surpass the 20-day moving average, which persisted as the primary resistance, residing below 77.20 €/tonne.

The concluding week of the month witnessed a persistent bearish trend in the EU ETS, with EUAs declining by over 5% compared to Friday, November 24th. New yearly lows were recorded at 70.43 €/tonne on Thursday, November 30th, marking the lowest point since October of the previous year. DEC23 EUA prices experienced a consistent decline from Monday, with a partial recovery towards the week’s end. The psychological support at 70 €/tonne was held, limiting further depreciation, partly due to the permit price trading below the lower Bollinger band for three consecutive sessions, indicating an oversold condition. Exchange liquidity increased, with a weekly average of over 33 million allowances traded on DEC23, surpassing the daily monthly average by 7 million EUAs.

 

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Francesco Rogato
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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”.