Weekly Carbon Report 17/11/2014 Market prices EUA Prices (€) Date Spot Dec 14 Dec 15 Dec 16 Dec 17 14 Nov 6.61 6.62 6.73 6.86 7.01 07 Nov 6.75 6.76 6.87 7.01 7.18 Date Spot Dec 14 Dec 15 Dec 16 14 Nov 0.09 0.09 0.49 0.49 07 Nov 0.08 0.09 0.47 0.47 CER Prices (€) SWAP Spread (€) Date Spot Dec 14 Dec 15 Dec 16 14 Nov 6.52 6.53 6.24 6.37 07 Nov 6.67 6.67 6.40 6.54 Volatile week for carbon. EU Commission supporting the MSR Proposal. US China climate deal. Market Stability Reserve Talks. Futures Daily Market Report for ICE-ECX European Emissions Market news Volatile week for carbon. After reaching 8 months high earlier in the week following policy news and speculative buying, prices have softened and dropped on Thursday and Friday as the market corrected itself with some traders reported to have sold EUAs to take profit. This price dropped was expected by analysts as prices rose earlier in the week primarily on positive political sentiment while energy fundamentals remained bearish. Some Analysts have suggested that the price increase earlier in last week was exaggerated and had predicted a downward correction for the last trading sessions of the week. Today, the EU Parliament Industrial Committee will discuss the Market Stability Reserve with analysts not expecting strong support by the committee for the measure. The Dec14 closed Friday’s session at €6.62. EU Commission supporting the MSR Proposal. In his first address to the EU parliament, the new EU Climate and Energy Commissioner Miguel Canete detailed the EU ETS reform timeline and reiterated the importance of the reform to boost clean energy investments in Europe. Canete wants the reform proposal to be agreed in the first quarter of 2015 and has confirmed that the Commission will not oppose an early implementation of the MSR or the permanent removal of the EUAs Surplus. The Commissioner also wants the EUAs to be given freely to companies after 2020 to help them remain competitive. US China climate deal. US and China have agreed last week long term carbon emission reduction objectives ahead of the 2015 Paris Climate conference where nations are expected to agree on a global post 2020 climate deal. The US has announced that it will cut its emission by 26-28% by 2025 compared to 2005 levels and increase the use of clean energy sources in its energy mix to 20%. China on the other hand has agreed for the first time to cap its emissions and announced it will reduce the use of coal. Having the Chinese and the Americans announcing their positions has been positively received by analysts; some of them are now predicting that nations will potentially agree on a global deal at the Paris meeting in December 2015. Market Stability Reserve Talks. The Market Stability Reserve, which is the proposed mechanism by the EU Commission to regulate the market, has entered formal law-making procedures and has become a central point in the discussions on the future of the EU ETS. In the next few months many meetings will take place to discuss the reform and agree a final text to be presented to the parliament plenary for voting. Some analysts are expecting volatility especially around the period when these meetings will take place and market participants are closely watching the outcome of these meeting from price direction. €8 EUA CER Spread 7 6 5 4 3 2 1 0 22 Nov 09 Dec 26 Dec 12 Jan 29 Jan 15 Feb 04 Mar 21 Mar 07 Apr 24 Apr 11 May 28 May 14 Jun 01 Jul 18 Jul 04 Aug 21 Aug 07 Sep 24 Sep 11 Oct 28 Oct 14 Nov For more information please call Simon Watson on +44 (0) 161 829 01 01 or email [email protected] Legal Disclaimer: Any pricing, market information and/or commentary contained in this Weekly Carbon Market Report (“Information”) is provided for general information purposes only. All prices are indicative and are not based on tradable prices and/or volumes. For the avoidance of doubt, [Gazprom Marketing & Trading Retail Ltd (t/a Gazprom Energy)] expressly disclaims all warranties, expressed or implied, as to the accuracy of the Information provided, or as to the fitness of the Information for any purpose. Recipients of the Weekly Carbon Market Report must not rely on the Information and must take appropriate steps to verify such Information before acting upon it.
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