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TTF, EUA Futures Price Correlation Increased

ENERGY
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TTF natural gas prices and carbon prices rose by around one-third since the beginning of April, nearing a five-month high, displaying an almost perfect correlation since the beginning of the year, with an average of around 0.9, IEA analyst Greg Molnar said.

  • TTF prices have been supported by geopolitical tensions, uncertainties around Russian gas supplies via Ukraine and Norwegian gas maintenances, he said.
  • The European coal-to-gas switching corridor remains the most important reason behind the EUA/gas price correlation, Molnar said.
  • Molnar said another reason for the strengthened relationship could be the rise of algorithmic trading and hedging strategies which tend to pair TTF and EUA futures.
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TTF natural gas prices and carbon prices rose by around one-third since the beginning of April, nearing a five-month high, displaying an almost perfect correlation since the beginning of the year, with an average of around 0.9, IEA analyst Greg Molnar said.

  • TTF prices have been supported by geopolitical tensions, uncertainties around Russian gas supplies via Ukraine and Norwegian gas maintenances, he said.
  • The European coal-to-gas switching corridor remains the most important reason behind the EUA/gas price correlation, Molnar said.
  • Molnar said another reason for the strengthened relationship could be the rise of algorithmic trading and hedging strategies which tend to pair TTF and EUA futures.