EUAs shed most of Thursday’s losses

The European power spot prices for today were strongly curbed by the continuously strong renewable production with the German wind production expected to remain near 40GW while the French hydro generation is forecasted to climb above 6GW. The low nuclear availability in France and Belgium and the weak demand due to the mild temperatures however limited the losses and the day-ahead prices averaged 131.82€/MWh in Germany, France, Belgium and the Netherlands, -21.61€/MWh from Friday and -23.38€/MWh week-on-week.

The carbon prices strongly recovered throughout Friday and eroded part of the previous day’s losses as participants saw the market’s recent sharp retracement as overdone. The rebound was attributed mostly to short-sellers taking their profits ahead of the weekend from the 8.4% drop EUAs posted last week while the low prices are likely to have attracted some compliance demand. The EUA Dec.22 eventually settled at 89.47€/t, +3.03€/t from Thursday’s close, but several traders remained skeptical about the recovery, pointing to the market’s still-strong bearish momentum as suggested by the Moving Average Convergence Divergence indicator. The 5-day moving average is capping the upside this morning and could prevent EUAs from climbing back above 90€/t if no bullish driver materialize in the energy complex or on the regulatory side.

The power forward prices traded sideways on the last session of the week, with warm and windy weather forecast still weighing on the front of the curve. Most of the futures contracts however edged up from the previous day, likely buoyed by the sharp rise of emissions and late recovery of gas prices.