European carbon emissions prices hit a 1-month high on Wednesday on the back of rising oil prices and concerns over the Norwegian gas pipeline, traders said. December-delivery European Union carbon permits were up 44 cents or 1.9 percent at 25.20 euros a tonne, the highest level seen since July 25. “Oil’s firming on Gustav, and that’s pushing (carbon) prices higher,” said a broker at London-based Newedge. U.S. benchmark crude oil futures rose for a third straight session on Wednesday to above $117 a barrel on growing worries that Tropical Storm Gustav may threaten oil and natural gas installations in the Gulf of Mexico. “We’re also seeing a genuine bullishness in the energy complex following last week’s Norwegian pipeline news,” he added, referring to the closure of a North Sea pipeline following a gas leak. “This has huge effects on the UK as well as Europe in terms of spare gas supplies in the winter.” A rise in natural gas prices mean utilities capable of fuel-switching may opt to burn dirtier coal, which would require them to buy more CO2 permits to cover their increased emissions. “Plus we’re seeing good technical buying,” the broker added, noting the market is “trying to push towards the 25.30 (euro) level, which we see as the next resistance.”

RSS feed for comments on this post. TrackBack URI

You must be logged in to post a comment.