EUA price
European Union Allowance price

EUA prices have fallen 15 per cent this week.

A dry, cold winter would drive up emissions and EUA prices.

He said EUA prices could be dragged further down in the coming days as aggressive selling continued.

Analysts also said spot EUA prices may hold in the near term, since supply remains limited.

EUA prices managed to regain some ground in afternoon trade, settling at 18.25 euros a tonne.

On the upside, EUA prices have bounced between the 18 to 19 euro level for the past eleven days.

But the trader did not expect EUA prices to go below a key support of 21 euros a tonne.

There will be some strong volatility in a couple of hours, when we see the effects on EUA prices,' an emissions trader said.

The very short-term outlook is still bearish with EUA prices following oil down on lack of demand,' he said.

EUA prices are caught in a bearish trend that reflects the general oversupply situation in the market.

An emissions trader said EUA price growth was stilted on uncertainty over wavering oil prices.

Power plants help set the EUA price when they choose between natural gas and higher carbon emitting coal to generate electricity.

Another said the rise in EUA prices was due to buyers suddenly remembering to check gas prices. '

Dec-08 EUA prices hit a seven-week low of 25.20 euros early Thursday before storming back to close up three percent.

Other banks said the EU announcement was bullish for EUA prices. '

EUA prices have fallen nearly 14 per cent this week, extending their drop since January to 53 per cent.

Although traders are optimistic about what the EU's proposals mean to EUA prices, no one is rushing out to buy credits just yet.

Traders said immediately after the auction EUA prices dipped to near the strike price of 16.15 euros a tonne but soon bounced back. '

Fages maintained his target of 35 euros a tonne for phase 2, but said EUA prices could exceed that in phase 3.

The free allocation of permits was cashed in at the EUA price by fossil generators, resulting in a "massive windfall gain".

Karmali added that uncertainty about the supply of carbon offsets to EU industry this year could also drive up EUA prices.

Some traders expect EUA prices to weaken further due to the oversupply of EUAs onto the market.

The Russia-Ukraine gas dispute is the only factor supporting EUA prices,' the Fortis trader said.

Carbon and energy research group RepuTex says it's wrong to assume the Australian price will automatically match the EUA price.

In fact, the EUA price fell below euro 10 in the first months of 2009 following shrinking levels of production output that resulted from the economic crisis.