European Union carbon permits had their biggest weekly gain since Sept. 6 after German Chancellor Angela Merkel said she favored a proposal to reduce a surplus of allowances.
EU permits for December fell 1 percent today to 5.13 euros ($7.02) a metric ton on London’s ICE Futures Europe exchange, paring their weekly advance to 11 percent. They reached a two-week high of 5.50 euros a ton on Oct. 16.
Merkel said in a speech that she supports a proposal to temporarily suspect sales of some carbon permits, known as backloading, her most explicit backing yet for moves to address an oversupply in the EU’s 53 billion-euro emissions trading system. The support of Europe’s biggest economy may help break a deadlock in EU talks on the glut fix.
“Merkel espousing backloading is good news for the ETS,” Matteo Mazzoni, an analyst at Nomisma Energia srl in Bologna, Italy, said by e-mail yesterday. “It’s one of those comments traders usually want to hear to bet on future moves.”