Friday, March 24

Gas Squeeze Drives European Carbon Futures to Fresh Record

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(Bloomberg) — A supply squeeze driving natural gas prices higher has sent the cost of buying pollution permits in Europe to a fresh record.

Carbon futures exceeded 96 euros a ton and are fast approaching the 100-euro mark many hedge funds and analysts had forecast last year. Higher gas prices are forcing European utilities to burn more dirty coal to keep the lights on, increasing demand for pollution permits.

Europe is grappling with an energy crunch as Russian supplies remain limited just as tensions in Ukraine are running high. Lower flows from Europe’s top supplier also come at a time the weather — which has so far helped avert the worst predictions for the energy crisis — turns cold, with temperatures across the UK set to drop below seasonal norms.

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