Category: Carbon Market News

Dear Madam or Sir,

The sky over northern Europe is a brilliant blue – a message that not only spreads good humour. In Germany, for example, the stable weather conditions this month caused temperatures to be significantly too high and a pronounced drought. On a long-term average, April is already 1.7 degrees too warm and a change in the situation is predicted by meteorologists for May at the earliest. In terms of the usual amount of precipitation, April has so far only met just under 3 percent of its target. These are alarming messages for agriculture and forestry.

This is a continuation of the problematic weather situations which scientists clearly attribute to global climate change. It is therefore extremely important that in its fight against the corona pandemic, politicians do not neglect the fight to achieve the climate targets. In fact, the first voices have already been heard that would like to see efforts to reduce CO2 emissions weakened by the crisis.

A look at the oil price shows that the decision of the oil-producing countries has had no lasting impact on the market situation. The planned reductions in production volumes are obviously not sufficient to compensate for the imbalance between supply and demand. Thus, after a brief recovery, the oil price is once again in the region of its 20-year low.

The price of CO2 emission certificates was also impressed by this last week and initially lost significantly in the middle of the week. In the second half of the week, however, buyers showed great favour and pulled the price up rapidly. At the start of the new trading week and with the deadline for compliance in mind, the price is currently above the 21-euro mark.

(Average Quotes Exchange / OTC)
Instrument	09/04/2020	17/04/2020	Change
EUA (Spotmarket)	21,03 EUR	21.66 EUR	+0.63 EUR
EUA (December-2019-Future)	21,08 EUR	21.70 EUR	+0.62 EUR
CER (Spotmarket)	0,31 EUR	0.31 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	31,77 USD	28.25 USD	-3.52 USD
EURO (Currency, Forex)	1,0923 USD	1.0871 USD	-0.0052 USD

(The average exchange quotes and OTC-prices shows the average between bids and ask of several exchanges and OTC markets for carbon emission rights in the ETS. Bid and ask has usually in Spot Market a visible spread. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into EUA. Crude Oil and Euro Currency shows day-end-exchange quotes. This market information has just an informational character and are no advice or offer to trade carbon emission rights or their futures and options. If you want to unsubscribe, please reply to this mail.)

Please call our international carbon desk if any further questions exist: +49.2831.1348220.

With kind regards,

Advantag Services GmbH

Dear Madam or Sir,

In the past year, the specific emission factor for the generation of one kilowatt hour of electricity in the average German electricity mix fell to 401 grams, which is 38% less than in the reference year 1990 and 14% less than in 2018. According to preliminary figures, the number for electricity generation in 2019 was 219 millions of tons of CO2 emitted, compared to 269 million tons in the previous year, and in 1990 electricity generation still caused 366 million tons of CO2.

Due to the slump in the global economy caused by the Corona virus, there is currently a significant oversupply of oil, which is why the oil cartel OPEC and its partners have agreed to cut production by 9.7 million barrels a day in May and June ( 159 liters) to be decided. This is intended to stabilize the price, which again suffered significantly in the past week.

Regardless, prices for greenhouse gas emissions have visibly recovered by more than 17% in the past shortened trading week. In addition to the realization that the market stability reserve will intercept a feared surplus of allowances in contrast to the previous economic and financial crisis, there is now also the fact that the obligated companies have to fulfill their compliance duty to pay for the previous year by the end of the month. So if one speculated on further falling prices, would be now deceived.

(Average Quotes Exchange / OTC)
Instrument	03/04/2020	09/04/2020	Change
EUA (Spotmarket)	17.86 EUR	21,03 EUR	+3.17 EUR
EUA (December-2019-Future)	18.06 EUR	21,08 EUR	+3.02 EUR
CER (Spotmarket)	0.31 EUR	0,31 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	34.95 USD	31,77 USD	-3.18 USD
EURO (Currency, Forex)	1.0802 USD	1,0923 USD	+0.0121 USD

(The average exchange quotes and OTC-prices shows the average between bids and ask of several exchanges and OTC markets for carbon emission rights in the ETS. Bid and ask has usually in Spot Market a visible spread. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into EUA. Crude Oil and Euro Currency shows day-end-exchange quotes. This market information has just an informational character and are no advice or offer to trade carbon emission rights or their futures and options. If you want to unsubscribe, please reply to this mail.)

Please call our international carbon desk if any further questions exist: +49.2831.1348220.

With kind regards,

Advantag Services GmbH

Dear Sirs and Madams,

There is certainly no lack of comments and assessments on the global corona crisis these days. In any case, it is a unique opportunity to observe how people react in crisis mode. Because all people are decision makers. Whether one has to make decisions for oneself, for a family, a company or a state. As the sometimes very controversial discussions show, it is of course anything but easy to make the right decisions and to foresee the consequences completely correctly.

Just how difficult this is can also be seen in the various markets. The oil price, for example, has so far lost almost 60 percent compared to the beginning of the crisis. Last night, the price fell once again, dropping to its 2002 low as the market was just processing the attack on the World Trade Centre. The trigger for the rather unexpected further drop in price could have been the renewed reversal in the assessment of the situation by US President Donald Trump, who suddenly spoke of a limit of 100,000 deaths being a success in the United States due to the virus. The fact that two major players in the oil market, Saudi Arabia and Russia, have apparently got caught up in a price war is also a burden.

The CO2 market, on the other hand, has been slightly optimistic in the past trading week. At the beginning of the week, the price of the December contract on the London ICE faced its lowest point since the beginning of the crisis at a nominal EUR 14.34, but during the week, it tendered up to EUR 17.80. This high volatility on a weekly basis still speaks for the uncertainty of many traders, but a factually correct decoupling from the oil price can also be seen.

(Average Quotes Exchange / OTC)
Instrument	20/03/2020	27/03/2020	Change
EUA (Spotmarket)	16.02 EUR	16,31 EUR	+0.29 EUR
EUA (December-2019-Future)	16.11 EUR	16,39 EUR	+0.28 EUR
CER (Spotmarket)	0.29 EUR	0,29 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	27.21 USD	28,15 USD	+0.94 USD
EURO (Currency, Forex)	1.0688 USD	1,1169 USD	+0.0481 USD

(The average exchange quotes and OTC-prices shows the average between bids and ask of several exchanges and OTC markets for carbon emission rights in the ETS. Bid and ask has usually in Spot Market a visible spread. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into EUA. Crude Oil and Euro Currency shows day-end-exchange quotes. This market information has just an informational character and are no advice or offer to trade carbon emission rights or their futures and options. If you want to unsubscribe, please reply to this mail.)

Please call our international carbon desk if any further questions exist: +49.2831.1348220.

With kind regards,

Advantag Services GmbH

Dear Sir or Madam,

In the past few days, events in Europe and the rest of the world have developed with unprecedented dynamism in relation to the corona virus.

Apart from the effects on social life and health care, the economy in particular will suffer significantly from the events. But now not only large companies from the manufacturing or service sectors are affected, it will also burden small and medium-sized companies.

One only has to think of the restaurants, bars, retailers and handicraft businesses, which in many cases do not have sufficient liquidity reserves to survive a business shutdown even for a few weeks. Even if the German government and the EU want to take historic measures to contain the economic and financial crisis, many smaller companies will still be hard hit because aid loans will also have to be repaid.

Financial markets closed with a plus sign after last week’s crash last Friday, and the Nikkei in Tokyo posted only a slight loss. However, the nervousness is likely to result in further losses, which is not surprising given the dynamic developments at the political level.

To avoid Italian conditions, further cuts appear to be unavoidable in Germany from the current perspective, which should not lead to buyers returning to the financial markets.

While the CO2 emission rights had held up fairly well last week and survived the crash on the stock and energy markets with relatively moderate losses, they slumped by more than 8% on Monday morning at the start of trading. The further development in Europe will certainly remain the most important factor in the coming days and weeks.

The Advantag team will continue to be available for you as usual in the coming days.

(Average Quotes Exchange / OTC)
Instrument	06/03/2020	13/03/2020	Change
EUA (Spotmarket)	23.40 EUR	21.92 EUR	-1.48 EUR
EUA (December-2019-Future)	23.42 EUR	21.94 EUR	-1.48EUR
CER (Spotmarket)	0.29 EUR	0.29 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	45.46 USD	35.07 USD	-10.42 USD
EURO (Currency, Forex)	1.1284 USD	1.1100 USD	+0.0184 USD

(The average exchange quotes and OTC-prices shows the average between bids and ask of several exchanges and OTC markets for carbon emission rights in the ETS. Bid and ask has usually in Spot Market a visible spread. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into EUA. Crude Oil and Euro Currency shows day-end-exchange quotes. This market information has just an informational character and are no advice or offer to trade carbon emission rights or their futures and options. If you want to unsubscribe, please reply to this mail.)

Please call our international carbon desk if any further questions exist: +49.2831.1348220.

With kind regards,

Advantag Services GmbH

Dear Sir or Madam,

OPEC tried to cut production to stabilize prices at the end of last week, but failed in negotiations with Russia. Originally, the daily production limits were to be reduced by a further 1.5 million barrels.

The issue of the corona virus currently dominates the financial and raw materials markets clearly, which is why the oil cartel considered this measure to be necessary. From OPEC’s point of view, it made more sense to extract a little less oil, but to realize more yields due to the rising prices.

As of Friday, Brent Crude Oil lost a good $ 5.00 and further negative reports regarding the European corona virus over the weekend caused a veritable crash on the market this morning. The oil price declined a good 30% and was just in the low at just over USD 31.

The fact that the oil price repeats itself quickly depends not least on signals from Russia, whether they are still giving in to support market prices. Russia is by far the largest oil supplier for Germany.

The German DAX index also lost more than 7% in early trading, while gold and the euro, on the other hand, benefit from the current market situation.

The prices for European CO2 emission allowances also fell significantly this morning by more than 3%, which is, however, significantly less than could be expected in relation to the oil crash. With a current price of around EUR 22.50 per EUA, the price is not far from the 6-month low of EUR 22.26 on October 9, 2019.

In the coming days, the nervousness of the financial and commodity markets will remain price-setting due to the fear of a recession regarding emission rights.

(Average Quotes Exchange / OTC)
Instrument	28/02/2020	06/03/2020	Change
EUA (Spotmarket)	23.55 EUR	23.40 EUR	-0.15 EUR
EUA (December-2019-Future)	23.61 EUR	23.42 EUR	-0.19 EUR
CER (Spotmarket)	0.26 EUR	0.29 EUR	+0.03 EUR
ICE Brent Crude Oil (Benchmark Future)	50.06 USD	45.46 USD	-4.60 USD
EURO (Currency, Forex)	1.1026 USD	1.1284 USD	+0.0258 USD

(The average exchange quotes and OTC-prices shows the average between bids and ask of several exchanges and OTC markets for carbon emission rights in the ETS. Bid and ask has usually in Spot Market a visible spread. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into EUA. Crude Oil and Euro Currency shows day-end-exchange quotes. This market information has just an informational character and are no advice or offer to trade carbon emission rights or their futures and options. If you want to unsubscribe, please reply to this mail.)

Please call our international carbon desk if any further questions exist: +49.2831.1348220.

With kind regards,

Advantag Services GmbH