Previous Week Events:

In the previous week, EUAs registered a 3.6% drop, in correlation with a decline in Dutch TTF, amidst easing geopolitical tensions.

Looking ahead, with a potential cold snap forecasted for Europe and markets anticipating a colder-than-expected winter, prices may edge upwards. However, it's important to note that gas reserves remain healthy and renewable energy supply continues to be robust. As a result, there is a chance that EUAs could trade sideways for the week, continuing to move in correlation with Dutch TTF as they await further news to determine their direction.

Auction volume: 14.6 million EUAs, 1 million more than last week

Energy Fundamentals

• Gas storage sits at 95.2% full on October 19th, compared to 95% on October 12th, 2024.

• Europe braces for a cold snap, as the La Niña pattern is forming.
• On average, analysts expect EUA prices to reach 76.88 EUR in 2025, 92.48 EUR in 2026 and 111.14 EUR, in 2027.
• Renewable energy prices in Europe registered a decline in Q3 2024.
• Planned maintenance will be carried out at Bulgaria’s nuclear power plant Kozloduy NPP, for Unit 6.
• Oil prices are edging up, after losing 7% last week.

Investment Funds

• The net short speculative position held by investment funds decreased to -24.10 m EUAs on October 11th (vs. -26.28m EUAs on October 4th).
• Gross short positions remained flat at -65.72m EUAs (vs. -65.95m EUAs).
• Gross long positions increased to 41.62m EUAs (vs. 39.67m EUAs).

Market Prices:

• Indicative Dec24 EUA Price: €62.85
• Indicative Spot EUA Price: €62.52
• YTD Dec24 EUA Price: €66.37
• MTD Dec24 EUA Price: €63.15

Chart A: December 2024 EUA Price (EUR)

Technical Analysis

The intersection of the lines within the MACD, alongside an oversold Stochastics oscillator, signals a possible movement upwards towards the middle of the Bollinger Bands at 63.80 EUR and the 50% Fibonacci level at 64.59 EUR. This movement could also be supported by the MA50 (66.91) and MA100 (67.93), both above the current level. However, if the price closes below the 61.8% Fibonacci level at 61.40 EUR, we could possibly see a stronger downside movement towards 60 EUR. As a result of these factors, there is a possibility that EUAs will move sideways for the week, with higher volatility expected on Wednesday, following the new CoT report.

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

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