On Wednesday, carbon prices jumped to their highest in almost a month, tracking massive gains in gas prices. EUA Dec’25  traded as high as €74,23 before closing at €73,44, posting a daily increase of 3%, the biggest since late January.

Meanwhile, the TTF front-month contract rose by 6.38%, with ING analysts attributing the increase to “fading hopes for a partial resumption in Russian gas flows to Europe.” However, the gains were tempered by warmer temperatures and a rebound in gas supply from Norway.

Despite recent increases in carbon prices, triggered by fading optimism over the peace deal, the most recent Commitment of Traders (CoT) report published by the ICE platform revealed that investment funds have reduced their long-term investments for a fourth week in a row, to a total of 31 million allowances. Such trading data suggest that investors are less confident about the likelihood of rising prices than they were a month ago.

The upcoming first quarterly option expiry of the year, scheduled for next week, is adding further pressure on the carbon market. The put/call open interest ratio currently stands at 1.08, suggesting a relatively balanced sentiment among traders. When this ratio is close to 1, it indicates that the market is neither strongly bearish or bullish.

The short-term weather forecast in Central Europe is bearish for energy related markets, with warmer weather and increased wind power supply expected in the region. However, on a longer term, low wind output predicted in Northern and Central Europe which could add bullish pressure on gas and carbon prices.