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RGGI Weekly Commentary: Prices rebound after the expiry of Jul22 delivery

August 9, 2022 by Megha Jha

  1. Total Weekly Volume of 2 M tons (-50% WoW change)
  2. RGGI ICE weekly average settlement price: $13.25  (+0.75% WoW)
  3. Long positions by compliance entities increased by 1.5 M tons. OI declines by 3.5 Million, as swap contracts decline after Jul22 expiry.

Summary:

The RGGI showed a small bounceback, after the delivery of the Jul22 contract. The front’s fall to $13 on the date of expiry, indicating that the actual price, entities are willing to pay at the moment for ownership is $13. Ahead of the upcoming auction, this delivery is an indicator of where the auction might settle.

RGGI Future Price

Weekly RGGI Volumes Decline (-50% WoW)

Market Fundamentals

(Green indicates upward influence on price, red indicates downward influence)

Trader Positions: 

Managed Money increase short positions 

An analysis of traders’ positions from CFTC data gives us an indication of market sentiments. OI declines by 3.5 Million, as swap contracts decline after Jul22 expiry. Long positions by compliance entities declined by 1.5 M tons, and compliance long by 3.3 M tons.

Total Positions (Positions on 2nd August)

Compliance Entities (Net Long Increased: 0.50 M tons):

  • Decreased long positions by 1.5 M tons
  • Decreased short positions by 0.04 tons

Managed Money (Net Long increased: 1.0 M tons):

  • Increased long positions by 0.09 M tons 

Analyst:

  • Craig Rocha (cmrocha@ckinetics.com)
  • Megha Jha (mjha@ckinetics.com)
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