European Union Carbon's Premium to UN Offsets Widens to Three-Month High
The premium of European Union carbon permits for 2012 to offsets from the United Nations, which boosted supplies last week, advanced to the widest in more than two weeks.
The spread between EU permits and UN credits for 2012, traded as a separate contract, increased 12 cents, or 3.8 percent, to 3.27 euros ($4.41) a metric ton as of 5:26 p.m. on London’s European Climate Exchange. That’s the widest since Sept. 9. It earlier today reached as much as 3.34 euros.
The premium of EU permits for 2010 over UN credits was unchanged. It had increased 13 percent last week after the UN issued 6.4 million credits, increasing supplies in the largest weekly handout since February. UN credits have jumped 17 percent in the past year, compared with 12 percent for EU allowances.
EU permits for December rose 0.6 how.
“Barring a sudden and unexpected move in energy prices, we do not see why carbon prices would change too much” in the next week, analysts at Orbeo including Emmanuel Fages in Paris said today in an e-mailed research note. Orbeo is the carbon-trader venture of Societe Generale SA and Rhodia SA.
Colder temperatures across Europe may boost demand this week, Fages said. There may be higher supply from nuclear and wind power, reducing the impact of the rising demand, he said.
“The main driver over the last 60 days remains power prices,” Marius Frunza, head of structuring at Sagacarbon, the trading and advisory arm of French investment company Caisse des Depots et Consignations, said in a research note e-mailed yesterday.
“A foreseeable increase in market turnover, mainly from utilities’ hedges, could bring significant drive to carbon traders,” the report said. Frunza forecast EU permits for this year will reach 17.50 euros a ton.
To contact the reporter on this story: Catherine Airlie in London at cairlie@bloomberg.net; Mathew Carr in London at m.carr@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
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