Fuels drive CO2 at speculative levels

After a Month of cosy waving carbon prices, up and down within a margin between € 20 and € 22, April brings clearly appetite to the carbon market. Today's 2008 contract reached the € 25 per ton of CO2, where € 24 was even a challenging level to test for a year. True, oils ad gas are up, coal is down again; so we will probably see some extra shortage for a while. But that will be followed by an early Summer fuel switch from coal to gas for power, given the high carbon price. This will make up for the temporary extra shortage.
Hence, you are used to this analysts' saying that supply and demand are the key carbon price drivers and that the threat of an overheating carbon market is always nearby.
That is why we will probably see today high volumes again, and lowering prices, because of profit takers, selling against this attractive price.