gas vs co2/EU Carbon Advances, Tracking Earlier Natural Gas

see attached - past two weeks. more comments my way. EU Emission Permits Advance, Tracking Earlier Natural Gas Gains

By Mathew Carr
Jan. 4 (Bloomberg) -- European Union carbon permits advanced, tracking gains in natural gas over the past two weeks.
EU allowances for December 2011 rose 0.3 percent to 14.28 euros ($19.14) a metric ton as of 9:57 a.m. on London's ICE Futures Europe exchange. U.K. natural gas for delivery in the six months through September rose 2.8 percent since Dec. 21, compared with 0.7 percent for carbon.
Higher gas prices may prompt some power generators to switch from the fuel, which requires half as many carbon permits as coal. Carbon rose 8.3 percent last year.
``Energy prices are clearly supportive and EU allowance prices should follow the rise of power and gas prices, which they have lagged recently,'' analysts including Paris-based Emmanuel Fages at Orbeo said yesterday in an e-mailed research report. Orbeo, the carbon venture of Rhodia SA and Societe Generale SA, said carbon may rise this week to 14.60 euros.
Carbon fell 5.3 percent last month, which was ``exorbitant'' considering that utilities need to hedge their forward sales of power this year, said Heiko Siemann, vice president at UniCredit AG's Carbon Solutions. ``Some cashed in their positions at the end of the year,'' he said today by e-mail. ``Now we see the backlash.''

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