Hedge funds seeking annual returns on investments of 15 percent may enter the European Union carbon market after prices plunged 59 percent in the past year, according to DIW Berlin. The plunging price may be enough to attract some new investors to the market, even as supply threatens to overwhelm demand over the next few years, said Karsten Neuhoff, an energy and climate policy specialist at the provider of economic research in the German capital. “It could be an attractive market for hedge funds,” he said yesterday by phone. Carbon permits for December fell 3.4 percent to 7.18 euros ($9.46) a metric ton on the ICE Futures Europe exchange in London at 12:55 p.m. local time. They fell to a record 6.38 euros a ton on Jan. 4. The market may be oversupplied by 2.7 billion tons by 2014, DIW estimated in a report dated March 8. Prices fell because they needed to find a level attractive to speculative buyers such as hedge funds, Neuhoff said.
Saturday, March 24, 2012
Hedge Funds May Try CO2 Market
Hedge funds seeking annual returns on investments of 15 percent may enter the European Union carbon market after prices plunged 59 percent in the past year, according to DIW Berlin. The plunging price may be enough to attract some new investors to the market, even as supply threatens to overwhelm demand over the next few years, said Karsten Neuhoff, an energy and climate policy specialist at the provider of economic research in the German capital. “It could be an attractive market for hedge funds,” he said yesterday by phone. Carbon permits for December fell 3.4 percent to 7.18 euros ($9.46) a metric ton on the ICE Futures Europe exchange in London at 12:55 p.m. local time. They fell to a record 6.38 euros a ton on Jan. 4. The market may be oversupplied by 2.7 billion tons by 2014, DIW estimated in a report dated March 8. Prices fell because they needed to find a level attractive to speculative buyers such as hedge funds, Neuhoff said.
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