Previous Week Events:

Last week, the EUA Dec24 contract posted a total gain of 1.9%. On Friday, however, the contract saw a 1% decline in its settlement price, moving in close correlation with Dutch TTF.

Looking ahead, there is a possible scenario for continued price growth, driven by news of new US sanctions on  Russia, which could impact the EU's gas supply, alongside a weak resolution of the COP29 future climate agenda and concerns over a possible Iranian retaliation strike against Iran. Additionally, with investment funds holding a net long position for the first time this year and the EU gas reserve significantly lower compared to last year, there is a chance that the price might continue to rise, following a sideways-to-bullish trajectory.

Auction volume: 11.7 million EUAs, 2.8 million less than last week

Energy Fundamentals

• Gas storage sits at 87.9% full on November 23rd, compared to 98.2%  on November 23rd, 2024.
• New U.S. sanctions might spell the end of EU energy payments to Russia through Russia's Gazprombank, potentially forcing the EU to find a new supplier.
• NATO and Ukraine are set to hold emergency talks on Tuesday, after Russia used a new, experimental, hypersonic ballistic missile.
• Iran is preparing its retaliation against Israel, says advisor to the supreme leader.
• COP29 conclusions disappoint, with few guidelines for concrete climate action in the future.
• The EU Commission has published the 2024 Carbon Market Report, with emissions from power and industry installation registering a reduction of 16.5%.
• Oil prices ease on higher supply, as tensions between Western powers, Russia and Iran kept a floor under the prices.

Investment Funds

• Investment funds now hold a net long position, with +1.54m EUAs on November 15th (vs. -2.63m EUAs on November 8th).
• Gross short positions decreased to -45.43m EUAs (vs.-47.17m EUAs).
• Gross long positions decreased to 46.97m  EUAs (vs. 44.54m EUAs).

Market Prices:

• Indicative Dec24 EUA Price: €69.56
• Indicative Spot EUA Price: €69.39
• YTD Dec24 EUA Price: €66.37
• MTD Dec24 EUA Price: €67.14

Chart A: December 2024 EUA Price (EUR)

Technical Analysis

From a technical point of view, on the daily chart, the EUA Dec24 contract is currently trading within an upwards channel. The MACD and RSI are both above their midrange, but still below overbought levels, suggesting a possible scenario that the price might increase through the coming days. However, with the CCI currently in overbought territory, this upward movement might be limited. The 70 EUR level is an extremely important psychological level and could potentially drive the price closer to the 24.6% Fibonacci retracement level at 71.72 EUR. If the price closes below the upward channel on the chart, a price correction towards the 38.2% Fibonacci retracement level at 67.77 EUR level might occur, especially since both the MA50 (65.22) and the MA100 (67.09) are below the current price level.

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

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