Summary:

1. CCA front dropped to $29.45 on Friday, losing $1.41 since Monday. The Nasdaq rose 8.5% WoW.
2. ICE weekly volume reported as 26.94 M tons (-0.1% WoW), 4-week moving avg. 21.45M tons
3. CFTC: Total OI increased by 3.739 M tons.

Technicals: 

Trading activity remained fairly similar as the week before. The secondary market gained only 0.232 M tons of OI WoW. The CCA front dropped to $29.45 on Friday. CCA prices for the first half of the week floated closely above $30. On Wednesday, participants in anticipation of a weakening front closed 3M tons of V22 Dec22 contracts that further depressed prices. Although the uptake of Jun22 positions (post-auction contract) at this price range continued; 1.4M tons of V22 Jun22 contracts entered the secondary market on Tuesday. 

The June22 contract is set to expire this week, taking with it 24M tons of OI. The Jul22 contract presently holds only 2M tons of positions in comparison. Traders expect the upcoming rollover to further lower the 2022 forward curve .

Trader Positions:

CFTC V22: Positions across all traders (21 June)

Total OI has increased by 3.739M tons. Both Compliance entities and fund managers have reduced their long and short positions. Compliance entities increased their long positions by 0.4 M tons and decreased short positions by 0.1 M tons. Managed money has reduced long positions by 1.5 M tons and short positions by 1.1 M tons. Managed Money are net long, while compliance entities increased their net short positions.

CFTC V22: Fund Manager change in positions (21 June)

Fund managers increased long positions and slightly decreased short positions. 

CFTC V22: Covered entity change in positions (21 June)

Compliance entities remain neutral.

Market Fundamentals:

1. Read our latest Analyst Note and forecast on Emissions, Supply, Demand, and Price.
2. California’s average gasoline prices have reached $6.34 per gallon (AAA data). The overall effect is a conscious reduction in VMTs, which could reduce transportation emissions.
3. Natural gas futures fell 27% WoW. Growing recession fears have led to lower-than-expected demand.

Analyst:
Craig Rocha (cmrocha@californiacarbon.info)
Anant Jain (ajain@californiacarbon.info )