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Watch: Market Movers Europe, Dec 13-17: EU to unveil crucial climate proposal as carbon prices soar and mobility dips

In this week's highlights: The European Commission is set to unveil its Hydrogen and Decarbonized Gas Market Package, carbon prices look set for more volatility, European methanol market players discuss Q1 prices, and both the International Energy Agency and OPEC will weigh in with their latest views on the near-term oil market outlook.

  • EC's big reveal on hydrogen, decarbonized gas (00:17)
  • Carbon prices hit all-time high (01:04)
  • IEA and OPEC monthly oil market report (02:06)
  • Methanol market players discuss 2022 prices (03:10)
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In this week's highlights: carbon prices look set for more volatility, European methanol market players discuss Q1-22 prices, and both the International Energy Agency and OPEC will weigh in with their latest views on the near-term oil market outlook.

But first, the European Commission is set to unveil its Hydrogen and Decarbonized Gas Market Package on Tuesday, adding a crucial building block to its "Fit for 55" climate proposals, aimed at cutting the bloc's emissions by at least 55% by 2030. The package is focused on reform of the EU's gas directive; on actions to cut methane leakage; and on energy performance in buildings. Crucially, the EC's remit is to integrate renewable and low carbon gases into existing gas grids, and define market rules and principles for the hydrogen sector. It also wants greater fairness for consumers, with new provisions expected on price regulation, switching and fuel poverty - timely given current gas prices.

Meanwhile, in the EU Emissions Trading System, we'll be watching out for more volatility this week, with December 2021 options contracts on ICE set to expire on Wednesday, and futures contracts next Monday. Carbon allowance prices hit a new all-time high of 90.75 euros per metric ton of CO2 equivalent on December 8, more than three times their average price in 2020.

The surge to 90 euros proved too much, and prices fell back almost 10 euros in a single day on December 9 in one of the most volatile days yet seen in the market's 16-year history. High natural gas prices are one factor driving the surge, but technical factors, not least the upcoming options contract expiry, are also having a big impact and the market is braced for the possibility of further highs this week.

And that takes us to our social media question for the week: What direction do you expect EU carbon prices to take in 2022? Tweet us your thoughts using the hashtag #PlattsMM.

In oil, after crude prices last week recovered around half of the losses suffered since omicron's emergence in late November, the oil market remains focused on what exactly the impact of the new variant will be on global economic growth and oil demand.

Market watchers will be sensitive to mobility data indicating the impact of any new restrictions on oil demand. Data from Google shows global mobility in most of the world's biggest oil consumer hit post-COVID highs in the week ending December 5, and new restrictions so far announced by Germany and the UK remain limited in scope. However, other data shows there has been a dip in air travel within China, the world's biggest oil importer.

Both the International Energy Agency and OPEC will weigh in on the near-term oil outlook this week with their closely watched monthly oil market reports, the first such reports since the emergence of omicron.

Standard Chartered bank said last Friday it now expects a significant excess oil supply in Q1 due to demand drag from the omicron variant.

And finally, methanol market participants are discussing prices for Q1 2022 term supply. European methanol markets remain on edge given the ongoing uncertainties over its main feedstock, natural gas, with prices still at historically high levels.

The European methanol contract price for the fourth quarter of 2021 was agreed at 485 euros per metric ton, the highest it's been since 2008, and this time round sellers are pushing for above 500 euros. With spot prices in Rotterdam ending last week over 5 percent higher, the momentum is behind them.

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