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EU carbon slips to end 2009 down 21 percent for year

Thu, 12/31/2009 - 6:30am
Reuters

LONDON (Reuters) - European Union carbon futures slipped in light trading on Thursday to end the year down 21 percent from 2008 closing prices.

Dec-10 futures for EU Allowances closed down 17 cents or 1.3 percent at 12.53 euros a tonne in an abbreviated trading session on London's European Climate Exchange (ECX).

Dec-10 volume was quiet at 725 lots traded by the exchange's midday close.

Spot EUAs trading on France's BlueNext finished the year at 12.33 euros per tonne of carbon dioxide.

Benchmark EUA futures averaged 13.13 euros a tonne in 2009, ending the year up 56 percent from an all-time low of 8.05 euros touched in February

"We've seen some utility selling today, but it's been completely dead since Monday," said one emissions trader.

"The market's been in a bad mood since Copenhagen so we'll have to see what happens on Monday, whether anyone wants to buy at these levels."

Traders and analysts became more bearish after UN-backed climate talks earlier this month failed to agree a legally binding successor to the Kyoto Protocol.

Lower emissions from European companies in the wake of the global economic downturn and the specter of industrial firms selling more excess EUAs to raise cash have weighed heavily on permit prices this year, analysts said.

Dampened energy prices in 2009 have also added pressure.

German Calendar 2010 baseload power shed 0.17 cents at 51.55 euros per megawatt hour while British natural gas for delivery in January 2010 traded down 0.6 pence or 1.8 percent at 33.60 pence per therm.

U.S. crude oil futures rose toward $80, poised for the biggest annual climb in a decade, a year after posting huge losses as the global economic crisis sapped demand.

Oil was supported on Thursday after data from the U.S. Energy Information Administration (EIA) showed declines in crude oil stockpiles last week, boosting expectations of demand recovery in the world's largest energy user.

Dec-10 CER prices trading on the ECX settled down 6 cents or 0.5 percent at 10.98 euros a tonne.

Only 13 lots of Dec-10 and 12 lots of Dec-12 contracts were traded in Thursday's shortened session.

Benchmark CER futures averaged 11.35 euros in 2009, ending the year up 54 percent from February's record low of 7.15 euros.

The EUA-CER spread closed 2009 at 1.43 euros a tonne.

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