The European carbon market closed lower in yesterday’s session, despite hitting a seven-week high earlier in the day. EUAs climbed to €73.82 in the morning, a level not seen since March, before reversing gains and ending the day at €72.90, down €0.51.

In the absence of any fresh fundamental trigger, the late downfall could be attributed to some profit-taking after the strong run that started in the previous day. Meanwhile, gas prices rose modestly with the TTF front month ending 1% higher.

However, the volatility on both markets could resume later this week as Russia and Ukraine prepare for direct peace negotiations on Thursday. “Though it is unclear where these talks will result in, any positive news is bound to provide some relief to the market,” analysts at Northern Gas and Power said, quoted by Reuters. 

Still, the European officials made it clear that the EU will not resume imports of Russian energy, even after a peace agreement, in order to avoid the risk of blackmail. “The European Union is very clear: we do not want energy supplies from Russia in the future. We do not want them now, and we do not want them after peace is concluded,” stated EU Energy Commissioner Dan Jorgensen.

Participants in the European carbon market will also closely monitor next week’s UK-EU summit in London, as both sides consider linking their emissions trading systems — a potentially bullish signal for both EUAs and UKAs.