Previous Week Events:

In the previous week, EUAs posted a 4.6% decline, as energy markets weakened on Friday. They followed a similar movement in Dutch TTF, which decreased on news that Europe’s gas deal with Azerbaijan was not in sight.

For this week, there is a possible scenario that EUA prices will trade sideways, awaiting new weather forecasts and the release of the CoT report on Wednesday. The US election on November 5th, alongside rising tensions in the Middle East, are expected to bring significant volatility to all energy markets over the coming days. However, for the moment, there is a chance that the market moves sideways, while it remains in a 'wait and see' mode.

Auction volume: 14.6 million EUAs, 2.8 million more than last week

Energy Fundamentals

• Gas storage sits at 95.2% full on November 2nd, compared to 95.3% on October 26th, 2024.
• The Climate Action Progress Report published on the 31st of October by the European Commission shows the largest annual drop of emissions in decades for 2023.
• Spain mounted its biggest peacetime disaster recovery operation, following the deadly floods in the last week.
• Iran vows a ‘Strong and Complex’ retaliation against Israel.
• Polls in the US currently show Kamala Harris in the lead, with voting ending tomorrow, 5th of November.
• Dutch TTF prices have sharply decreased last week, as Slovakia said that, currently, Europe’s gas deal with Azerbaijan is not in sight.
• Oil prices rise as OPEC+ delays output hikes.

Investment Funds

• The net short speculative position held by investment funds decreased to -15.07m EUAs on October 25th (vs. -24.33m EUAs on October 18th).
• Gross short positions decreased to -56.47m EUAs (vs. -64.79m EUAs).
• Gross long positions increased to 41.4m EUAs (vs. 40.46m EUAs).

Market Prices:

• Indicative Dec24 EUA Price: €65.60
• Indicative Spot EUA Price: €65.33
• YTD Dec24 EUA Price: €66.31
• MTD Dec24 EUA Price: €63.87

Chart A: December 2024 EUA Price (EUR)

Technical Analysis

From a technical point of view, Dec24 EUAs are currently trading around the 50% Fibonacci level at 64.59 EUR. The price is just above the MA20, but below the MA50 and MA100. The MACD, CCI, and RSI indicators show that, currently, the market is neither overbought, nor oversold. If today's closing price falls below the 50% Fibonacci level, we could see a further downward movement toward the lower end of the Bollinger Bands and the 61.8% Fibonacci level at 61.40 EUR. Conversely, if the price closes above the 50% level, we might see a sideways movement, with potential for the price to eventually reach higher levels, with the MA50 (65.74), MA100(67.46) and 38.2% Fibonacci level at 67.77 EUR acting as key resistance points to watch.

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

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