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DBLM Solutions

Luciano Magliocco +353 87 9051928 (Mobile) dblmluc (SKYPE) luc@dblmsolutions.com

DBLM Solutions Carbon Update


Carbon Overview

David Boles 01 4433584 (Direct) dblmdavid (SKYPE) david@dblmsolutions.com

At time of writing the Dec '13 EUA Contract was at 4.77. Carbon has made healthy gains over the last week and this again is being attributed to positive noises regarding the set aside vote on the 17 April and increased power use across Europe. The more power used the more carbon emitted. German baseload jumped 6 euros and the French baseload jumped 9 euro. However, this will be offset to a certain extent due to the Easter holidays which generally result in less power demand. Meterologists have declared that March is as cold as we have experienced only once every 25 years. The energy complex looks to be changing to a bullish move with the exception of Nat gas after Brent hit a low of 106.90 on the 22 March. Currently trading at 108.25. However it is still a little too early to determine whether or not a bullish trend has been established. This morning's EEX auction was successful, 3.6 million permits were sold for 4.54 each. Just took a look at the Carbon charts and there is a strong possibility at this stage pending a succesful vote on the backloading issue that we may not see historical lows for carbon any time soon. Commercials might do well to look at their Offset quotient for phase 3 and take care of it now at an outlay that will be a fraction of the price during phase 3. Keep in mind that their is also a massive oversupply of offsets for phase 3 and the voluntary market hasn't taken the slack as was expected.
Dec 13 EUA

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