The most recent Commitment of Traders (CoT) report published by the ICE platform revealed that investment funds have reduced their net long positions (long term-short term) to 50,3 million allowances from 58,7 million allowances in the previous week. A similar trend was observed for the TTF gas contracts.

Trading data shows that, as of last Friday, speculative traders have reduced their long-term investments by an impressive 11,3 million allowances to a total of 93,5 million allowances. Meanwhile, funds decreased their short positions by 3 million allowances to 43,2 million allowances.

Participants view the positions of speculators as an indicator of market sentiment. “Net long” indicates that investors are betting on the carbon price to increase while “net short” suggests that investors are betting on a decrease in EUAs.

The sentiment reflected in the most recent report by ICE is confirmed by trading data. The EUAs declined in four trading sessions out of five during last week, closing with a 7,3% weekly loss. “Some profit-taking happened,” explained Yan Qin, carbon analyst at ClearBlue Markets.