In week 23, EUAs registered a total decline of 3.7%, including a 1% drop on Friday. The EUA market continued to move in strong correlation with Dutch TTF.

For this week, one possible scenario is that EUA prices will continue moving in tandem with Dutch TTF, as there is currently no major news on the horizon. With EUAs breaking out from the upward channel they were previously following, the market currently sits in a "wait and see" mode, where both upward and downward movements are possible.

‍

Auction volume: 11.1 million EUAs, 2.3 million less than last week.

‍

Energy Fundamentals:

• Gas Storage: As of June 8, gas storage is at 71.6% full compared to 71.2% on June 8, 2023.

• Oil Prices: Oil prices stabilized on Monday ahead of the US Federal Reserve meeting and the OPEC+ monthly oil market report.

• Geopolitical Developments: Hungary will continue importing oil and gas from Russia despite increasing EU pressures. Tensions escalate with Houthi rebels as they strike a British warship and two commercial ships near the Yemeni port city of Aden.

• Political Climate: Support for far-right parties surges in the EU vote, signaling a potential shift in dynamics for EU energy policy.

• Weather Impact: Heat boosts cooling demand across Southeast Europe.

‍

Investment Funds:

• Speculative Positions: The net short speculative position held by investment funds decreased to -8.05 million EUAs on May 31st (vs. -6.68 million EUAs on May 24th).

• Gross Positions: Gross short positions increased to -52.16 million EUAs (vs. -51.12 million EUAs), while gross long positions remained flat at 44.11 million EUAs (vs. 44.44 million EUAs).

‍

Market Prices:

• Indicative Dec24 EUA Price: € 69.91

• Indicative Spot EUA Price: €68.37

• YTD Dec24 EUA Price: €65.32

• MTD Dec24 EUA Price: €72.1

‍

Chart A: December 2024 EUA Price (EUR)

Technical Analysis

The price is currently oscillating around the 50-day moving average at the 70.05 EUR level. The next support is at 68.59 EUR, aligning with the lower Bollinger Band and close to the 38.2% Fibonacci retracement level. Indicators such as the FSI and MACD suggest there is still some room for the price to decline further. However, a crossover in the FSI could soon trigger a shift in the MACD, indicating a potential change in direction. Overall, the weekly technical outlook appears neutral, with some expected volatility.

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

‍

AFS ENERGY B.V.

The information contained in the AFS Energy EU ETS Report, hereinafter Report, has been compiled or arrived from sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy, completeness, timeliness, correct sequencing or correctness.

AFS Energy B.V. does not accept any liability, contingent otherwise for (i) the accuracy, completeness, timeliness or correctness of any information provided in the Report, (ii) any decision made, or action taken by you in reliance upon any of them and (iii) any direct or consequential loss arising from the use of the Report. AFS Energy B.V. does not make any representation or warranty about the suitability of the information in the Report.

The information contained in the Report is published for the assistance of the recipient but is not to be relied upon as authoritative or taken in substitution for the exercise of judgement by any recipient.