In the previous week, EUAs registered a 2% loss. As auction volumes were lower and no major news came out throughout the week, EUAs traded closely in line with the Dutch TTF.

Looking ahead, there is a possibility that EUAs will continue following a slightly bullish trajectory. Late Saturday, it was announced that 267 million EUAs will be withdrawn from the EU ETS over 12 months starting this September, sending a strong bullish signal to the market. This, combined with the recent upward momentum, might drive EUA prices even higher in the short and mid-terms. For this reason, there is a chance that we will see the current uptrend continue throughout the coming week.

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Auction volume: 13.4 million EUAs, 5.4 million more than last week.

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Energy Fundamentals:

• Gas storage sits at 70.2% full on June 01, compared to 69.2% on 1 June 2023.

• The EU ETS Market Stability Reserve will reduce auction volume by around 267 million allowances between September 2024 and August 2025.

• The EU is trying to ban Russian energy imports completely.

• OPEC+ Agrees to Extend Production Cuts, in an attempt to drive oil prices higher.

• A new report shows that renewables have pushed EU-level coal and gas generation to a historical low.

• Tensions in the Red Sea are on the rise, as Houthi rebels are firing at US ships.

• The US is putting forward a proposal for an end to the conflict in Gaza, raising hopes for a potential cease-fire.

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Investment Funds

• The net short speculative position held by investment funds decreased to -6.68 m EUAs on May 24th (vs. -14.01 m EUAs on May 17th).

• Gross short positions decreased to -51.12 m EUAs (vs. -54.51 m EUAs).

• Gross long positions increased to 44.44 m EUAs (vs. 40.5 m EUAs).

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Market Prices:

• Indicative Dec24 EUA Price: € 76.24

• Indicative Spot EUA Price: €74.49

• YTD Dec24 EUA Price: €65.04

• MTD Dec24 EUA Price: €75.74

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Chart A: December 2024 EUA Price (EUR)

Technical Analysis

Once upon a time, the 74.25 level was a strong resistance, but it has now become a solid support for DEC24 prices. Observing the past three days of trading, the price appears to be moving in an uptrend channel. Technical indicators, including the FSI and MACD, are slightly bullish, confirming the uptrend. However, if the price breaks the support at 74.25, it could potentially drop to the 73.39 level. Such a move would need confirmation from the indicators, which are not currently aligned for that scenario.

Chart B: December 2024 EUA Price (EUR) - Technical

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