The latest Commitment of Traders report (CoT) published weekly by the ICE platform revealed that, as of Friday, 31 May 2024,  investment funds have increased their net short compared to the previous week. This type of investment behavior means that speculators are betting on falling carbon prices.

ICE market data shows that at the end of last week, investment funds have added 1 million allowances to their short positions to a total of 52,2 million allowances while their long positions have remained relatively stable at 44 million allowances. 

Consequently, speculators were net short (short positions- long positions) by 8 million allowances. This is around 20% higher than in the previous week when net short positions reached just 6,7 million allowances, the lowest level since October 2023. 

Source: Commitment of Traders

The commitment of traders report has been published each Wednesday by the ICE platform since 2018,  reflecting the positions held on the previous Friday by financial institutions and operators with Obligations Under Directive 2003/87/EC, an indicator of the market sentiment. 

The benchmark Dec’24 EUA contract settled at €74,10 on Friday with a weekly loss of  2%. However, the carbon prices ended May with a 9,3% gain, “largely driven by the upward move in the TTF gas market,” according to Yan Qin,  carbon analyst at LSEG.