As anticipated, in the past week, EUAs reached a low of 55.41, extending their downward movement amidst a bearish energy market. Despite a temporary price surge on Thursday on news that Germany would cancel some of the exit allowances formerly allocated to its coal plants, bullish momentum was swiftly crushed, failing to change the prevailing downtrend.

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

‍Looking ahead this week, we anticipate EUA prices to continue dropping, with compliance buying partially compensating for the prevailing bearish sentiment in the market. Nevertheless, in the absence of significant bullish fundamentals, we anticipate EUAs to trade towards the 51-60 range. (51-56 range)

As of February 15, gas storage levels stand at 64.75%, down slightly from 66.32% recorded on February 9, indicating a gradual depletion. The weather forecast for the remainder of the month suggests unexpectedly warmer temperatures, which could impact energy consumption patterns. The TTF front month has opened below 25 EUR/MWh, signalling a continuation of the bearish trend in energy markets, albeit with some bullish risks. This trend is further compounded by bearish pressure on EUAs. In a bid to increase decarbonisation efforts, Germany has committed to allocating 4 billion euros towards industry subsidies for reducing carbon emissions, reflecting a proactive approach towards combating climate change. Consequently, power prices are mirroring the bearish trajectory driven by the anticipation of milder weather conditions.

‍Technical Analysis

Analysing the present technical indicators, a price closure below 55.00 today may signal the establishment of a fresh support level of around 51 EUR. Additionally, the hourly chart reveals a continued downtrend channel, potentially pointing towards a target of 52.2 EUR. The RSI on the daily chart is gradually entering an oversold territory, indicating the potential for further bearish movement, a notion corroborated by FSI and supporting the hourly chart movement.

You are reading our newsletter with a bit of a delay. Want to receive our new insights as soon as we publish? Sign up here: https://bit.ly/3whLXOY

‍

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 judgment by any recipient.