On Wednesday morning, the European carbon market continued its upward move, trading comfortably  above €78, a level last seen in March 2024. Today’s trend is in line with gas, with the TTF front month also trading higher. The carbon market also reacted to the latest trading report published by the ICE platform.

In yesterday’s trade, the EUAs moved in a rather tight range, ending the session with minor changes, however rising for a  fourth day in a row. Meanwhile, the gas market “appeared to calm somewhat in later trading yesterday and gas contracts dropped into negative territory, neutralising some of Monday’s gains,” as stated by Energi Danmark in a note this morning. 

The traditional correlation between gas and carbon also broke down briefly this morning as the carbon market reacted with rising prices to the most recent Commitment of Traders report (CoT) released by ICE, while gas prices were slightly falling. 

Speculative traders holdings: short versus lung

Source: Commitment of traders reports 

According to trading data, investors have increased their long-term investments by a massive 9,9  million allowances to an impressive total of 68,5 million allowances. In relative terms, this amount represents a 17% raise compared to the previous week, suggesting a strong belief on behalf of speculators that carbon prices will increase. 

Meanwhile, short term positions were rather stable, leading to a net long positions (long term – short term) of 29 million allowances. It is highly likely that this additional demand was one of the reasons behind the surge at the end of last week.