Overview

Last week was softer for compliance carbon as EUA prices fell steadily after a rally on Monday failed to breach the €80 resistance line that the December 25 futures contract had been challenging the week previously. Tuesday saw prices slump and tested buyers convictions in holding positions at €79, before the rest of the week saw bearish sellers win out and trading follow a downward path to a weekly-low of €78 on Friday. Last week’s Commitment of Traders (COT) report showed an increase in funds long position by 4.3%. This is compared with Operators with Compliance Obligations, who also grew their long positions by 2.9%. With a softer price environment looking likely as energy markets also struggle to sustain price increases, the Fund’s positions may well come under pressure this week, making this Wednesday’s COT worth looking out for.