Emission permits fall to 4-month low as natural gas declines
Energy Trade
European Union carbon-dioxide permits declined to their lowest in more than four months as natural gas prices fell to records for a second day. December 2006 allowances to emit carbon dioxide fell as much as €1.05, or 7.4%, to €13.20 ($16.81) a metric ton, on the European Climate Exchange in Amsterdam. They traded for €13.55 at about 7 p.m. local time. That was their lowest since May 15. Burning gas to make power produces about half the carbon dioxide of coal per unit of electricity. UK gas for October delivery has fallen about 45% since its high in April, according to the ICE Futures exchange. „There's a lot less utility buying” of emissions permits, Gilles Corre, a London-based broker at Evolution Markets LLC, said yesterday by telephone. „They've sold all their power, so they don't need to buy allowances any more because they're covered.” Falling gas and power prices also helped drive down emissions, Corre said. UK gas for delivery in each month through March yesterday fell to records for a second day, according to prices from the ICE Futures exchange in London on Bloomberg. Some contracts recovered from lows after the UK government-owned weather service said there was „a signal for lower temperatures and an increase in the frequency of cold snaps” late this winter season. The UK is Europe's biggest natural-gas market and its prices tend to influence other energy commodities. Prices for this winter have declined because new projects will allow more gas to be imported from Norway and mainland Europe, boosting supplies. (Bloomberg)
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