In this week's Market Movers Europe with Fatemeh Zahedi:
- Egypt eyes decarbonization of key sectors #COP27
- Warm weather to keep lid on European gas demand
- French nuclear capacity expected to return
- Macroeconomic pressures, Sverdrup surge dampen oil market
- More steel producers report results
UN climate talks kick off at Sharm El Sheikh in Egypt on Sunday.
Host country Egypt is hoping to make major progress on decarbonizing the oil, gas and steel industries and is keen to highlight the role of gas as a transition fuel.
We'll be watching for any signs of fresh demand for carbon offset credits as companies and governments adopt mechanisms to help manage the energy transition.
Unseasonably warm weather across much of Europe is likely to dampen gas demand this week, with temperatures in Germany set to be as much as 5 degrees Celsius above seasonal norms.
German gas demand was down by an impressive 36% versus the 2018-2021 average in late October.
The mild temperatures also allowed Germany to continue building gas stocks, which are now at 99% of capacity.
In power markets, focus will be on how long the current mild and windy weather will last. For now, even with France's nuclear reactor ramp-up well behind schedule, expected price spikes have not yet materialized.
Last week, EDF cut its 2022 output estimate and delayed return dates for seven reactors. Still, a dozen units are scheduled to return over the coming fortnight.
In oil, COVID-19 restrictions in China coupled with US interest rate rises have dampened sentiment.
More bullishly, OPEC+ production cuts are set to kick in this month, and tougher curbs on Russian oil loom. Russian crude and condensate output is expected to fall by more than a million barrels a day between September 2022 and February 2023, according to our analysts.
Meanwhile, the reporting season continues this week for steelmakers, with Voestalpine, ArcelorMittal, Swiss Steel and Salzgitter all releasing their results in the latter half of the week
I'm Fatemeh Zahedi, thank you for kicking off your Monday with S&P Global Commodity Insights