BRUSSELS (Bloomberg) -- European Union emission permits fell after research firm Point Carbon raised its forecast for surplus allowances.

EU carbon permits for December dropped 0.7 percent to 14.32 euros a metric ton on London’s European Climate Exchange as of 5 p.m. local time. They rose as much as 1.4 percent earlier on Friday as oil prices advanced.
There’s a “bearish mood in the CO2 market,” UniCredit SpA’s Carbon Solutions team said on Friday in a note, citing a surplus of permits, weak industrial output and declining purchases by utilities.
Spare EU emission allowances will reach 242 million metric tons of carbon dioxide equivalent in the five years through 2012, 48 million tons more than a forecast last month, Oslo-based Point Carbon said on Friday.
EU permit prices have climbed 1.6 percent this week, their second weekly gain as crude gained and equities rallied on optimism that the global economy is recovering from a recession.
The Standard & Poor’s 500 Index, the benchmark gauge for American equities, rose on Thursday to the highest close since Barack Obama was elected president in November as a record number of U.S. companies beat analysts’ earnings estimates.
“Market activity is now mainly driven by actors with no fundamental interest in trading; they are primarily guided by the optimistic mood in international financial markets,” UniCredit said in the report.
The bank said the next support level for carbon permits will be 14.15 euros, with resistance at 14.60 euros.
“If demand from financial investors remains solid, this could lend further support to the CO2 prices,” UniCredit said. “However, if they curtail their buying activities, we do not see very much price support through purchases by utilities over the summer months.”