Overview

In the run up to the outbreak of war between the US, Israel and Iran over the weekend, energy markets began heating up last week with traders pricing in a war risk premium into major markets like oil, natural gas and power. Carbon, however, continued to be led by political headlines within Europe and shrug off wider geopolitical concerns.

EUAs began the week in a bearish mood as the benchmark December futures contract fell on Monday from the opening levels of €72 to test €70. Wednesday brought a counter-move upwards, but news on Thursday that Italy had caused for a pause to the ETS during the July EU reform consultation saw all gains disappear and the futures market dip below €70. This bearish momentum continued even as TTF and Oil began to rise as the US Navy vessels got into position on Friday.