European energy markets weakened on Friday as renewed optimism over a possible Ukraine–Russia peace deal weighed on prices. Forecasts showing that the current cold spell across much of Europe will soon be replaced by milder, windier weather added further downward pressure.

European carbon prices fell 1.17% during Friday’s session, marking their first weekly decline in a month, although it was a modest one at 0.64%. Trading volumes slipped by 4% from the previous week, with 168.6 million allowances sold, still above this year’s weekly average.

Bearish sentiment continued early Monday following reports that weekend peace talks had been “highly productive.” EUA Dec ’25 briefly dipped below €80, a level it had managed to hold throughout the previous week. Meanwhile, the TTF front-month contract traded below €30/MWh for the first time since May 2024.

“Geopolitics will dominate this week and temperatures appear to be above seasonal norms, which may add further pressure,” said Arne Lohmann Rasmussen, chief analyst at Global Risk Management, as quoted by Bloomberg.

On the bullish side, EUAs could find support from the upcoming auction break, which starts in three weeks on 7 January. In addition, any shift in weather forecasts toward colder temperatures with less wind could quickly lift carbon prices.