EMISSIONS: EU End-Of-Day Carbon Summary: EUAs/UKAs Fall On EU Gas Losses

EUAs/UKAs are rangebound tracking EU gas losses on tariff-driven economic uncertainty. The intraday correlation between EUAs-TTF has been above 0.60 in the afternoon and is tightening to 0.70 near close, while the intraday correlation between EUAs-UKAs is tightening to 0.52 near close.

• EUA DEC 25 unchanged at 72.6 EUR/t CO2e
• UKA DEC 25 down 0.93% at 50.2 GBP/t CO2e
• TTF Gas JUL 25 down 0.9% at 35.525 EUR/MWh
• NBP Gas JUL 25 down 0.2% at 83.36 GBp/therm
• Estoxx 50 up 0.6% at 5408
• Correlation between EUA/TTF for 30-day period tightened to the highest level since early April at 0.66 from the 0.61 on the previous day.
• Correlation between EUA/UKA for 30-day period remained high at 0.45.
• Correlation between UKA/FTSE100 for 30-day period remained at 0.40.
• The EUA Dec25 premium to the UK equivalent remained at a similar level at €12.99/t CO2e.
• ICE EUA futures are trading in a range. A bull cycle remains in play and a fresh cycle high on May 16 reinforces this theme. Attention is on resistance at €75.02, the May 16 high, and €75.17, 61.8% of the Jan 30 - Apr 9 bear leg. Clearance of both levels would confirm a resumption of the uptrend. Initial support to watch lies at €70.31, the 50-day EMA. A clear break of the average would undermine the bullish theme.
• EUA POSITIONING –  Speculator positioning in EU ETS futures on the ICE exchange was slightly more bearish with net long positionings edging lower, after four consecutive weeks of raising bullish bets, according to the latest COT data as of 30 May.
• UKA POSITIONING – Speculator positioning in UK ETS futures on the ICE exchange resumed bullish bets after cutting long positions for the first time since early March in the prior week, according to the latest COT data as of 30 May.
• EUA Dec25 implied volatility as of 3 June fell to its lowest level since 18 March while EUAs Dec25 rose just slightly over 1% w/w as of 3 June, suggesting a stable market and participants are expecting weaker disruptions in the short-term.
• EU emissions are tracking an 11% year-on-year increase so far this year due to increased fossil-fuel generation amid low wind output data from Independent Commodity Intelligence Services showed, cited by Bloomberg.
• European Federation for Transport and Environment (T&E) called for the Market Stability Reserve (MSR) reform to keep EU ETS 2 prices close to €55/tCO2e, it said.