LONDON - The benchmark contract for European Union carbon emissions futures hovered around 13 euros a tonne on Monday, seeking direction, traders said.

EU Allowances (EUAs) for December delivery inched down 2 cents or 0.15 percent to 13.05 euros ($19.49) a tonne at 0807 GMT. Volume was light at 296 lots traded.

The Dec-10 contract was down 2 cents or 0.15 percent at 12.24 euros. The EUA Dec-09-Dec-10 spread narrowed to 19 cents.

EUA prices sank below 13 euros on Friday to a seven-week low of 12.98 euros a tonne as industrial selling broke a key technical level and weak energy prices failed to support.

(12.98) is acting as a support level this morning. But given the market's general bearish trend, prices could move toward 12 euros, an emissions trader said.

The next support level is 12.60 euros a tonne if 12.98 is broken, while the first resistance level is seen at 13.17 to 13.25 euros, traders said.

U.S. oil rose more than 1 percent to top $78 a barrel on Monday, after the U.S. dollar lost its footing and heightened tensions between key oil exporter Iran and Western nations raised speculation of a potential supply threat.

German Calendar 2010 baseload power on the EEX was down 24 cents or 0.52 percent at 45.65 euros per megawatt hour.

Certified emissions reductions were slow to trade.

(Reporting by Nina Chestney; Editing by Keiron Henderson)