Despite a stable start to the day on Wednesday, the European carbon market witnessed strong gains in the afternoon session before closing at €70,33, with a gain of 2,67%, the highest daily increase in almost a month.

Market participants have attributed the upward trend to investors closing their positions. “The price increase is a direct effect of the options expiry,” said a trader quoted by Montel News. He also added that the bullish momentum most likely would be short-lived, arguing that the speculators are continuing to build up their bets on falling prices.

Source: Commitment of Traders

According to the latest Commitment of Traders report, published yesterday for the week ended on 14 June, investment funds have increased their short positions by 0,5 million allowances while reducing their long positions by 3,26 million allowances, leading to a net short of 13,6 million allowances, the highest in a month.

This type of investment behavior indicates that, as of last Friday,  speculators are pessimistic about the future market price, which correlates with the market dynamics. On the same day, the benchmark for Dec’24 contract settled at €68,28 with a weekly loss of  4,4%.