‘Carnage’ in European carbon market as prices fall to 15-month low

EF News
"EU carbon prices have slumped 15% in one week, as a slew of bearish news took its toll on the markets.

The benchmark EU allowance (EUA) contract for December 2011 delivery has suffered an eight-day losing streak, dropping to €13.29 in trading this morning, a low not seen in the December futures contract since April 2010. The market recovered slightly as the day progressed, reaching €13.65 at lunchtime – but that still represents a 15% drop from last Thursday’s close of €16.10.

“It’s just been carnage these last few days,” said a trader at an investment bank in London. “There has been a huge amount of liquidation from funds, banks and utilities.”