Overview

The modest gains in carbon seen over New Year have consolidated and strengthened as EUAs rejected the theory that the resumption of auctions on January 7th would see a correction lower back towards €80. A resumption of the supportive correlation with natural gas and colder temperatures helped TTF and EUA futures break out of their ranges with EUAs last week threatening to break into the €90s, which was well and truly achieved this week. Participation in auctions has been strong after the holidays, but January options expiries have also played their role as carbon traders were forced into reversing bearish positions as prices moved upwards.