The first week of the month was positive for EUAs: the DEC22 contract closed at +4,68% compared to Friday, September 30th. Weekly highs are reached on October 5th, with EUAs touching 71,36 €/tonne, the highest price since September 21st. The market, however, was still showing uncertainty, and it was still early to confirm a trend inversion, which would have been enabled should the DEC22 have broken the resistance at 72,50 and surpassed the threshold of 74,00 €/tonne. Volatility, however, stayed high: prices have moved in a corridor between 64,24 €/tonne and 71,36 €/tonne, designing a weekly trading range of 7,11 €/tonne wide.

The second week of the month was slightly bearish for EUA prices, which left on the ground 2,62% compared with Friday, October 7th. The period showed a bearish trend initially, while a consistent price recovery was observed last Thursday. The trading range narrows: EUAs have moved in a channel 4,39 €/tonne wide, relatively tighter than the previous week’s over 7 €/ton. However, DEC22 EUAs can’t decrease below 65,01 €/tonne, Wednesday’s daily lows; at the same time, they couldn’t break through the psychological threshold of 70,00 €/tonne, stopping at 69,50 € on Thursday 13th.

During October’s third week, confidence in the market allowed some minor price gains: the DEC22 EUA earned 1,03%, trading again above 69,00 €/tonne at the end of the week. Prices were quite cautious during the first part of the week. Although volatility was high, especially on Wednesday, daily settlements didn’t differ from the openings. The bullish breakout was registered on Friday 18th, following the positive results from the European Council concerning the measures to contain gas prices.

During that time, the main trend remained bearish, with a first psychological resistance still at 70,00 €/tonne and a technical one at 72,50 €/tonne. The support remained at 65,00 €/tonne. Towards the end of the month, prices observe a sensible recovery, with a +18,18% during the last week of the month. Positive sentiment possibly originated from the European agreement on capping the gas price: this allowed EUAs to reach daily highs at 82,58 €/tonne on the last Friday of October, the highest level since August 30th.

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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”.