European Union carbon permits for December rose to the highest level in three weeks as power and natural gas advanced amid forecasts for lower temperatures.
Electricity for delivery in April in Germany, France, the U.K. and the Nordic region gained at least 2.5 percent, according to broker data compiled by Bloomberg. Temperatures were forecast to decline in the coming days and wind generation was set to fall, Bloomberg’s wind-power model showed. Higher power prices encourage utilities to sell electricity ahead, boosting demand for carbon permits. Month-ahead natural gas in the U.K. also climbed.
December carbon futures rose as much as 11 percent before closing 8.2 percent higher at 4.49 euros ($5.77) a metric ton, the highest since March 4, on London’s ICE Futures Europe exchange.
The closing price was above a technical resistance level of 4.48 euros, which represents the 38.2 percent Fibonacci retracement level of the low on Jan. 24 of 2.81 euros to the high on Feb. 18 of 5.52 euros.
Fibonacci analysis is based on the theory that securities tend to rise or fall by specific percentages after reaching a high or low.
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