The week started with rising prices, continuing the uptrend that started on Friday. It was no surprise to see the upward trajectory in gas prices being mirrored by an increase in the price of EUAs. The benchmark contract for CO2 closed the day at €63,51, the highest in two weeks, with a daily gain of 4,84% while the TTF front month was up by 4,89%.

An unplanned outage at Norway’s Asgard field weighed on the gas market, affecting carbon as well. According to the Norwegian system operators, the gas flow was reduced by 12,7 mcm/day. As a result, the country’s overall gas exports dropped from 340 mcm/day on Friday to 327,6 mcm/day on Monday.

Furthermore, according to energy trader Energi Danmark, the European gas market “once again has turned focus to the Middle East, and the fears that Iran could get involved in the Israel-Hamas war, which could affect global gas supply.”

Meanwhile, the cooler weather forecast added to the upside. “The best bet for the second half of April is near normal with some cooler-than-normal days and generally unsettled conditions,” LSEG meteorologist Georg Mueller said, quoted by Reuters.

However, the bullish factors on the gas market could be offset by a healthy gas supply, with storage levels 60% full, prompting ING analysts to believe that “any strength will be short-lived given the comfortable inventory levels. We continue to expect TTF to average EUR25/MWh over the second and third quarter of this year.”

Near-term fundamentals remain bearish for carbon prices as well. Historically, the price of EUAs was highly volatile because of the approach of the compliance deadline set at the end of the month. However, the seasonal rally could now shift from April to September given the new compliance calendar.