The European carbon market showed signs of stabilization on Friday, recovering slightly after a sharp €3 drop during the previous two sessions. The benchmark EUA December 2025 contract closed at €70.96, up modestly from Thursday, yet still marked a 2.8% decline for the week.

Despite Friday’s modest rebound, bearish momentum resumed on Monday morning. EUAs fell below the €70 mark for the first time since May 20. “The market wasn’t ready to drop below this point on Friday,” noted Mind Energy in a Monday commentary.

Also in early trading on Monday, TTF front-month gas dropped below €33/MWh and is heading for its seventh consecutive daily decline. Last week, benchmark gas prices “wiped out about a fifth of their value—the biggest weekly loss since July 2023,” observed Bloomberg.

Both markets appear to be repositioning in the wake of the Middle East conflict. The unexpected ceasefire between Israel and Iran, combined with strong LNG imports into Europe amid subdued demand from China, is offering a much-needed breath of fresh air to energy-related markets.

However, falling carbon prices may draw in compliance buyers. “With the drop in prices, we have seen increased interest from industrials and expect this to provide some support,” BBVA Bank warned in a note this morning.