The European energy complex shows mixed signals this week. Natural gas futures have dropped to multi-decade lows, nearing their most bearish levels in nearly half a century. While natural gas futures remain at historically low levels, suggesting downward pressure, these prices also create opportunities for strategic hedging ahead of the winter months. This may lead to increased buying activity and a modest upward push on EUA prices. Geopolitical developments, such as potential progress in Russia-Ukraine peace discussions and Germany seeking new trading partners after U.S. tariffs, may reduce risk premiums but do not eliminate the structural demand for emission allowances. Overall, the trend for the coming week appears mildly bullish, with potential for prices to consolidate or rise slightly above recent support levels.

Auction volume: 11.34 million EUAs, 2.08 lower than last week

Energy Fundamentals

• Gas storage sits at 83% full on August 22nd
• Natural Gas Futures Sink Ahead of ‘Most Bearish’ Close of Summer in Nearly 50 Years
• Cheap Winter Gas Prices Offer Hedging Opportunity
• Following 15% tariff implementation Chancellor Merz says Germany should look for new trade partners.
• US VP Vance says Russia has made significant concessions toward Ukraine peace deal
• Lavrov outlines terms for Ukraine peace: big power security guarantee and no NATO

Investment Funds

• Investment funds increased their net long position to +20.21m EUAs on August 15th (vs. +28.85m EUAs on August 8th).
• Gross short positions decreased to -39.86m EUAs (vs  -37.12m EUAs).
• Gross long positions increased to 60.07m EUAs (vs. 65.97m  EUAs).

Market Prices:

• Indicative Dec25 EUA Price: € 71.92
• Indicative Spot EUA Price: € 71.38
• YTD Spot EUA Price: € 71.00
• MTD Spot EUA Price:  € 71.02

Chart A: December 2025 EUA Price (EUR)

Technical Analysis

This week, EUAs continue to trade with a mildly bullish bias, showing signs of consolidating near upper resistance levels. The RSI remains in neutral territory, suggesting neither overbought nor oversold conditions, while MACD hovers slightly positive, indicating a potential shift toward upward momentum. CCI readings remain flat, reflecting limited directional conviction, yet compressed Bollinger Bands hint at the possibility of a breakout as volatility builds.

Key resistance is now observed around €73.36, aligning closely with the upper Bollinger Band, while the 100-day MA at €72.23 and 50-day MA at €69.18 provide additional layers of technical structure. On the downside, immediate support lies at €71.55 (EMA zone), with further support around €70.31 (mid-Bollinger Band) and €69.18. A sustained move above €73.36 could pave the way for a test of the €75.00 region, whereas a close below €71.55 would likely return the market to a consolidation phase.

Chart B: December 2025 EUA Price (EUR) - Technical

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