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Watch: Market Movers Europe, Mar 29-Apr 2: Suez Canal to reopen, OPEC+ reviews production cuts

In this week's highlights: Suez Canal looks to reopen and address logjam; industry weighs long-term carbon concerns; it's meeting week for the oil producing alliance OPEC+; and gas stocks in the European Union drop to less than 30% full.

  • Suez blockage ripples through commodity markets
  • OPEC+ to potentially ease production cuts
  • Gas stocks low ahead of injection season
  • Long-term carbon concerns drive power
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In this week's highlights: industry weighs long-term carbon concerns; it's meeting week for the oil producing alliance OPEC+; and gas stocks in the European Union fall to less than 30% full.

But first, all eyes remain on the container ship Ever Given, which has been blocking the Suez Canal for seven days now. Local media reports show that the ship has been refloated today, with traffic expected to resume to some degree. One report says that livestock carriers will be prioritised first.

Early on March 23, the Ever Given ran aground in the canal, blocking traffic in both directions and sending ripples through global commodity markets. The canal is a key artery for many commodities travelling between Asia and Europe, accounting for almost 12% of global trade.

At last report, over 320 ships were waiting to transit the canal -- a traffic jam that is expected to take a week or more to clear -- but there could be longer-term impacts on shipping traffic throughout the region. Some shipping re-routing has started around Africa via the Cape of Good Hope, which can cause delays of up to two weeks in deliveries and bring higher costs, including having to consume more marine fuel.

Market participants are not expecting any long-term impacts on shipping rates, although a spike in Mediterranean tanker rates on Friday caused concern amongst traders.

That takes us to our social media question for the week: What long-term impact do you think the Suez Canal blockage will have on the global commodity markets? Tweet us your thoughts using the hashtag #PlattsMM

Aside from the drama in the Suez Canal, the oil market is also keeping a close eye on this week's OPEC+ meeting on Thursday, looking for any clues as to the future policy after April. The oil producing alliance previously slashed crude oil output in order to settle market conditions during the COVID-19 pandemic.

Crude oil prices have fallen over the past week amid fears over a rise in coronavirus cases in many parts of Europe and this is playing into wider demand concerns for oil.

Industry watchers will be particularly watching oil powerhouse Saudi Arabia and its approach to easing the current production cuts.

In European gas, storage sites are now less than 30% full after a particularly strong demand over winter.

Despite starting October -which is typically the beginning of the gas withdrawal season- at almost 100% full, European storage facilities have subsequently emptied at rates not seen since the Beast from the East weather event in 2018. Market players are now preparing to switch to what is known as "injection mode", in a bid to replenish these stocks.

Estimates suggest 50% more gas will be needed this summer to build back stock levels, which were critical in meeting the record high demand triggered by cold weather earlier this year.

The strong injection demand could provide support for prices. The market is likely to look to pipeline supplies from Russia as well as LNG to provide the necessary volumes.

For the European power markets, one word to sum up conditions would be: strength, with contract values roughly doubling where they were this time last year.

Driving the recovery have been record-high carbon dioxide prices and higher generation feedstock prices, supported by near-normal demand levels. Going into the second quarter, all eyes will be on whether carbon prices at Euro 40 plus can be sustained as fossil-fired generation backs off and solar ramps up.

The carbon market, however, seems focused on the longer-term challenge of net zero rather than near-term physical fundamentals. And one thing we can be certain of: power demand will be higher this April than last.

The Platts Atlas of Energy Transition is your map to the sustainable commodity markets of the future. You can explore the Atlas by vising the address displaying on your screen.

Thanks for kicking off your Monday with us, and have a great week ahead!