EU carbon Falls In Selling Ahead Of UK Auction
Date: 12-Mar-10
Country: UK
Author: Reuters
European carbon futures nudged lower in early trade on Thursday, likely on speculative selling before next week's UK auction, one trader said.
EU Allowances (EUAs) for Dec-10 delivery were down 11 cents at 1200 GMT, at 13.12 euros a tonne.
"I think people are selling ahead of the auction, it feels like its going short," said one trader.
"There's very little industrials activity," he added, referring to buyers who have to buy carbon permits to balance their emissions under the European Union's emissions trading scheme.
European carbon prices often rally on the day of the monthly British auctions of emissions permits. The next auction of 4.5 million EUAs is due on March 18.
Each month a trading pattern had emerged where market participants sold large volumes of EUAs ahead of the auction, driving prices lower, hoping to buy back and make more money in the expected subsequent rally, the trader said.
Oil futures rose by some 8 cents to $82.17 a barrel remaining below an eight-week high hit a day earlier as a spike in Chinese inflation had investors mulling prospects of monetary tightening in the heart of energy demand growth.
British natural gas contracts for April rose by 0.46 pence or 1.5 percent to 30.50 pence per therm while German Calendar 2011 baseload power was up 5 cents at 46.35 euros per megawatt hour.
Benchmark CER futures were down four cents at 11.74 euros a tonne, setting the EUA-CER spread at 1.38 euros.
