UPDATE 1-EU carbon nears all-time low

(Updates prices, adds further detail)

LONDON Feb 3 (Reuters) - European carbon CFI2Z9 was down 26 cents or 2.3 percent at 11.03 euros ($14.18) at 1137 GMT on Tuesday, nearing an all-time low for the present 2008-12 trading cycle.

"It seems to be speculators selling it down at the moment," one carbon trader said.

Carbon traders are weighing the possible impact of industrial companies participating in the European Union emissions trading scheme selling surplus carbon emissions permits that they have accrued as a result of falling output.

Companies for example in the steel, cement and paper sectors can sell their surplus permits, called EU allowances (EUAs), on the carbon market to raise cash.

This month companies will get their 2009 allocation, raising the prospect of further sales driving the price down more from an all-time low for the present trading cycle of 10.8 euros two weeks ago.

The benchmark EUA price fell as low as 10.9 euros early on Tuesday.

The price of EUAs follows expected long-term demand for emissions permits, which has sagged on expected falling industrial output.

Another factor which could weigh on prices is Polish EUA issuance, which is expected in the next couple of weeks, Barclays Capital analysts said in a note.

"With 14 percent of EUAs still not issued, mostly in Central European member states, the pressure on the spot market is likely to mount when issuance (...) finally occurs," they said.

German Cal '10 baseload power BY1DE-1Y was down 25 cents at 49.70 euros per megawatt hour.

U.S. light crude for March delivery CLc1 traded around $40 a barrel, as some investors grew convinced that aggressive supply cuts by OPEC may finally be building a floor under crude prices [O/R].

Benchmark certified emission reductions (CERs) CEREZ9 were down 6 cents or 0.6 percent at 10 euros a tonne. The EUA-CER spread narrowed to 1.03 euros.

Barclays Capital expects the spread to test a one euro a tonne level for the rest of the year as further downside weighs. (Reporting by Gerard Wynn and Nina Chestney, Editing by Sue Thomas)