EU carbon slips on oil and gas, utility selling
LONDON - European Union carbon emissions futures eased slightly on Friday on the back of sliding oil and gas prices, with utilities shedding some of their length, traders said.
EU Allowances for delivery in December 09 traded in a narrow range on very low volume of 150 lots, dropping 10 cents to 13.75 euros a tonne after the open but then recovering to last night's close of 13.85 by 0830 GMT (3:30 a.m. EST).
The futures opened above the 200-day moving average for the first time since November 17.
Dec-10 EUAs were more active, with volume of over 1,000 lots being transacted in early trading. The futures opened at 14.07 euros, a cent below the 50-day moving average, but traded down 6 cents or 0.4 percent at 13.98 euros.
Utilities have been selling with only a few banks and speculators on the buyside, one trader said, adding that prices could be pressured down toward 13.70 euros.
The short and medium-term fundamentals are still bearish, but I'm expecting a quiet day today.
The 09-10 spread narrowed to a record low of 14 cents, which the trader said was near the cost of carry between the futures.
Analysts expect European utilities, who have historically held a surplus of EUAs, to dampen prices by selling some of their excess permits before the end of the year.
U.S. crude oil futures fell for a third day on Friday, to below $76 a barrel, pressured by weak U.S. service sector data and nervousness ahead of non-farm payrolls data later in the day.
Jan-10 gas futures were down 0.25 pence at 27.50 pence per therm. German Cal' 10 baseload power was unchanged as was prompt British gas.
Benchmark CERs added 4 cents or 0.3 percent at 12.90 euros a tonne. The EUA-CER spread fell slightly to 0.92 euros.
In a report published on Friday, the International Emissions Trading Association said the U.N.'s Clean Development Mechanism, initially a great success, was now a victim of poor management, delays and conflicting rulings that were stifling investment.
(Reporting by Michael Szabo; Editing by James Jukwey)
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