European carbon prices had a weak start to the week. The EUAs traded briefly at €68,70, its lowest since 2 May  before settling at €69,81. The market closed lower for the second day in a row, tracking similar movements in gas prices. 

The bearish sentiment was fueled by the return in auction supply. This week, the EEX platform will auction around 11 million EUAs and 0,9 million EUAAs compared to just 8,5 million allowances last week. Furthermore, next week, the auction supply will reach 13,4 million allowances adding further downward pressure on carbon prices. 

Yesterday’s losses have also been driven by weak gas prices amid strong flows from Norway and warm weather. According to Gascco, the Norwegian operator responsible for transporting gas to Europe, flows were nominated at 325 mcm/day, the highest in almost three weeks. 

“Temperatures are now expected to fall slightly, albeit holding above seasonal normal for the weeks ahead”, according to Auxilione. In Germany, Europe’s largest gas consumer, temperatures should stay 30C above the average this week and around  20C above next week, based on data analyzed by SMHI.

This week, several statistics are expected to be published and are poised to be a crucial barometer for the carbon market as well. The main event will be on Wednesday, when Eurozone’s GDP data for April is scheduled for release. Investors are expecting a slight increase in economic activity, a bullish factor for the carbon market if confirmed.