The most recent Commitment of Traders (CoT) report published by the ICE platform revealed that investment funds have expanded their net long positions (long term-short term) to  9 million allowances from 1,5 million allowances in the previous week. This means that investors strongly believe that carbon prices will increase.

Data shows that, as of last Friday, speculative traders have increased their long-term investments by 3,5 million allowances to an impressive total of 51,5 million allowances. Furthermore, funds decreased their short positions by 2,8 million allowances to almost 42,5 million allowances, the lowest level since October 2023.

The net short positions have been gradually decreasing since early October 2024 with speculative investors switching from a net short (short – long) to a net long (long – short) for the week ending November 15, indicating a more optimistic market sentiment.

“The latest CoT data sends a slightly bullish signal” wrote Luyue Tan, senior carbon analyst at LSEG. In fact, the sentiment reflected in the most recent report published by ICE is confirmed by trading data, carbon prices posting a 1,9% weekly gain at the end of last Friday’s session.