EU carbon at 4-month low on UK gas, spec selling

LONDON (Reuters) - European carbon emission futures dropped to a four-month low on Tuesday as weak energy prices prompted speculators to use technical levels to drive selling, traders said.

EU Allowances for December delivery fell 5 cents or 0.37 percent to 13.48 euros ($17.40) a tonne at 0713 GMT. They fell to an intra-day low of 13.36 euros in opening trade, their lowest level since April 6.

The prospect of a well-supplied gas market in September is dragging the market down, traders said.

"Natural gas is one of the main drivers. There is a lack of buying interest from utilities and one bank is pushing down the market triggering stop losses," an emissions trader said.

Further falls are likely in the absence of support from compliance buyers like utilities, traders said.

EUAs fell by four percent on Monday, after a weak energy complex, especially natural gas prices, triggered selling when prices broke through key technical levels.

British curve gas prices eased on the prospect of more liquefied natural gas tankers coming to the UK and expectation that the gas market will be oversupplied in September due to maintenance on gas exporting facilities.

When EUAs fell through a support level of 13.60 euros, it triggered stop-loss orders, traders said.

German Calendar 2011 baseload power on the EEX was down 24 cents or 0.49 percent at 49.10 euros per megawatt hour.

Oil steadied near $79 a barrel as forecasts see falling crude inventories and rising refined product stocks in the United States, continuing a trend that has helped keep prices in a $10 range for almost two months.

British gas prices for September were down 0.45 pence at 38.15 pence per therm.

Certified emissions reductions were down 2 cents or 0.17 percent at 11.55 euros a tonne.

(Reporting by Nina Chestney; editing by James Jukwey)