The most recent Commitment of Traders (CoT) report published by the ICE platform revealed that investment funds have expanded their net long positions (long term-short term) to 19,6 million allowances from 4,5 million allowances in the previous week.

Data shows that, as of last Friday, speculative traders have increased their long-term investments by 5,5 million allowances to an impressive total of 58,6 million allowances. Furthermore, funds decreased their short positions by 9,5 million allowances to 39 million allowances, the biggest decline since September 2023.

According to Carbon Pulse, “investment funds now hold the largest net long position in 22 months.” Given these aggregate holdings, it appears that investors strongly believe that carbon prices will increase, sending a bullish signal for the EUA price.

The sentiment reflected in the most recent report by ICE is confirmed by trading data. The EUAs rose in all four trading sessions during last week, ending with a 6% weekly rise, strengthening for the second week in a row and reaching a six month high on Friday.

Speculative investors have switched from from a net short (short – long) to a net long (long – short) in the week ending November 15, indicating a more optimistic market sentiment. Prior to that, since August 2023, funds had been holding a net short position, suggesting a preference for selling over buying.