November 19, 2009 / 3:15 PM / 10 years ago

EU carbon prices hover below 13.50 eur/t

LONDON (Reuters) - The benchmark contract for European Union carbon emissions futures hovered below 13.50 euros a tonne on Thursday afternoon, even though weaker oil and mild European weather pointed to greater losses, traders said.

EU Allowances (EUAs) were down 8 cents or 0.59 percent at 13.42 euros ($20.09) a tonne at 1449 GMT, with heavy volume at 4,104 lots.

“Prices are quite still around 13.50 euros. The fundamentals are telling us prices should be much lower as (unseasonably mild) weather forecasts are rather negative and oil is coming off,” an emissions trader said.

Mild and wet conditions mean lower demand for electricity, thereby emissions permits.

Oil, German power and UK natural gas prices were all softer on Thursday.

“There are some people on the buy side, particularly on the spot market buying clips of 100,000 at a time. Someone is obviously in need of EUAs to buy ahead of Dec-09 contract expiry in December,” the trader added.

The spread between the EUA Dec-09 and Dec-10 contracts was at a record low of 19 cents.

“If people had a short position in the Dec-09 contract they are rolling it to Dec-10 because it is close to the delivery date,” another trader said.

Spot EUAs on France’s BlueNext inched down 1 cent or 0.07 percent to 13.49 euros a tonne.

U.S. oil futures drifted lower on Thursday, hovering beneath the key $80 a barrel mark as gains in the dollar weighed on prices and doubts about the pace of demand recovery in the United States dampened sentiment.

German Calendar 2010 baseload power on the EEX was down 73 cents or 1.56 percent at 46.15 euros per megawatt hour.

U.N.-backed certified emissions reductions (CERs) were up 7 cents or 0.57 percent at 12.45 euros a tonne.

Reporting by Nina Chestney; Editing by Keiron Henderson

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