EU carbon prices up amid thin trade

LONDON (Reuters) - Prices for European carbon emissions were higher on Friday, after a strong opening on the back of firmer equity markets but amid very light volume, traders said.

EU Allowances (EUAs) for December delivery were up 15 cents or 1.09 percent at 13.89 euros a ton at 1216 GMT, with light volume at 1,234 lots.

Carbon traders said trading activity was quiet as many players were either absent from the market or slowing down before going on holiday.

"Prices have barely moved since this morning," said a trader.

EUA prices rose to 14.09 euros in opening trade, their highest level since Tuesday, on the back of firmer equity markets and macro-economic data, traders said.

Data showed on Thursday that Euro zone economic sentiment increased in July to its highest level in eight months, while continuing unemployment benefit claims decreased in the United States, fuelling hopes that signs of recovery are evident.

U.S. oil fell below $67 a barrel on Friday as investors turned their attention to weak fundamentals after the previous day's sharp equity-led gains.

German Cal '10 baseload power on the EEX was up 6 cents or 0.12 percent at 49.15 euros per megawatt hour.

Certified emissions reductions (CERs) were up 5 cents or 0.41 percent at 12.39 euros a ton. The widely-traded EUA-CER spread widened to 1.50 euros.

In market-related news, the British government said on Thursday it would make carbon emissions credits exempt from value-added tax from midnight in response to fraudulent trading on a French emissions exchange.

(Reporting by Nina Chestney; Editing by Sue Thomas)