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Investment Funds Positioning Bullish For UK Carbon Allowances

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Homepagemarkets-real-timeBulletUKBank Of England (BOE) Market News

Investment funds are expecting a future hike in the price for UK Carbon allowances, with net long position reaching an all-time high, according to BloombergNEF.

  • Net positions rose to a record 6.6mn long on 31 May from 2.4 million allowance short at the start of February.
  • The bullish stance on UK carbon allowances is due to the volatile renewable generation – which could open the room for fossil generation, policy uncertainty and some recovery in the industry.
  • EU carbon prices are also adding support.
  • UK Carbon allowances reached £46/t CO2e on 6 June, up from a low of £30/t CO2e at the end of January.
  • But the opposite trend was seen in EU ETS positioning, with investment funds positioning turning more bearish as net short positionings increased.
  • EUA DEC 24 down 0.5% at 71.73 EUR/MT.

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Investment funds are expecting a future hike in the price for UK Carbon allowances, with net long position reaching an all-time high, according to BloombergNEF.

  • Net positions rose to a record 6.6mn long on 31 May from 2.4 million allowance short at the start of February.
  • The bullish stance on UK carbon allowances is due to the volatile renewable generation – which could open the room for fossil generation, policy uncertainty and some recovery in the industry.
  • EU carbon prices are also adding support.
  • UK Carbon allowances reached £46/t CO2e on 6 June, up from a low of £30/t CO2e at the end of January.
  • But the opposite trend was seen in EU ETS positioning, with investment funds positioning turning more bearish as net short positionings increased.
  • EUA DEC 24 down 0.5% at 71.73 EUR/MT.