European carbon prices rose for the third straight trading session on Thursday, rebounding from levels well below €70 on Monday. However, the momentum has eased, with gains slowing from +2.33% on Tuesday to +1.91% on Wednesday and just +0.18% on Thursday.

“A lot of focus on the European energy markets has been on temperatures the last few days, with a heatwave dominating across the continent, including in the northern parts. This has led to an increase in gas demand,” according to Mind Energy.

In recent weeks, much of continental Europe has endured an extended stretch of hot weather. However, Severe Weather Europe reports that “the remnants of the heatwave will push far east into Eastern Europe and the Black Sea region by mid-next week.”

Meteorologists forecast a sharp temperature swing in Central Europe, with readings set to fall from 10–12°C above average on Thursday and Friday to 6–10°C below normal by next Tuesday. This nearly 20°C shift is expected to significantly reduce power demand.

Yesterday’s upward momentum on the carbon market was further supported by strong auction results. The sale of 3.25 million allowances cleared at €70.52, €0,08 above the secondary market price. The cover ratio reached 1.69, the highest since June 25, indicating growing buying interest.

The European carbon market edged lower early Friday, mirroring declines in equity markets, while gas prices saw a modest uptick. Attention is now turning to the upcoming trade talks between the US and EU, with the market expected to remain sensitive to any developments ahead of the July 9 deadline.