(CaliforniaCarbon.info, Dec 12, 2016) Whilst traders sought to complete end of-year business, traded volume remained strong this week totalling 7,800,000. By vintage, the majority of the volume was split between V2016 and V2017 with 56.4% and 42.6% of the total, respectively. The small remainder was left for V2018. By delivery date, the majority of the activity was inter-year with 53.1% for the current front and benchmark, whilst 40% of the total was accounted for by December 2017. There was also some light trading on the advance months of January and February 2017.

This volume translated into 1,777,000 new contracts for the market’s open interest. There were a net 1,103,000 contracts created for the December 2017 date, whilst there was actually a slight net liquidation at the front of the market – likely traders rolling forward old positions for the New Year.

Finally, after vibrating throughout the week, the market’s front price ended up by a single cent at $12.81, the advance December 2017 closed at $13.15. The market’s year-ahead implied funding-rate reached a 6-month high on Monday at 2.91% before returning to 2.68% by Friday. Additionally, there was an ARB Board Meeting on Thursday, however there was no agenda item directly pertinent to Cap-and-Trade in California.

Harry Horner – (harry@californiacarbon.info)