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Watch: Market Movers Europe, Dec 20-24: Festive season to see oil prices drop, growing uncertainty over gas supply

In this week's highlights: European gas markets are still fretting about supply levels coming from Russia, the European Commission is set to decide on its sustainable finance taxonomy, and steelmakers look to discussions on the future of the EU Emissions Trading System.

Also in the European commodity markets:

  • Omicron bears down on festive season (00:16)
  • Russian gas supply concerns (01:03)
  • EU sustainable finance taxonomy decision due (02:36)
  • Steelmakers eye ministerial discussions on ETS (03:30)
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In this week's highlights: European gas markets are still fretting about supply levels coming from Russia, the European Commission is set to decide on its sustainable finance taxonomy, and steelmakers look to discussions on the future of the EU Emissions Trading System.

But first, to oil markets, where prices have been seesawing amid concerns about the spread of the omicron variant. As we approach the European holidays, mobility levels have fallen sharply in several regional capitals. But the price pressures are not all downward as European refiners have been cutting processing rates, while in some European cities congestion levels are still relatively elevated, with people shunning public transport in favor of their cars. Gasoline markets in Europe have also been kept tight on the back of reduced exports from the United States, and strong demand for European gasoline in West Africa, serving as a reminder that transportation demand remains strong in several key global markets.

Next we turn to European gas, where prices last week recorded a string of fresh record highs as uncertainties over Russian supply continued to roil markets. The TTF day-ahead contract was assessed at an all-time high of 141.65 euros per megawatt-hour on December 16, a 775 percent year-on-year increase. That came on the same day that Gazprom chose not to buy any day-ahead capacity for supplies into Germany via Poland, despite delivering regular volumes up until then in December, although capacity was then bought within-day. The market will be watching closely for capacity purchases this week as a guide to supply levels. European storage facilities remain at historically low levels and are just 61% full. This is well down compared with previous years and, as you can see in the chart, it is significantly lower than the level of 80% at this time last year. There are also increasing concerns that cold weather in the remaining winter months could see Europe come close to using up its storage. Meanwhile, although the Nord Stream 2 operator said last week it had started filling the second string of the controversial pipeline, there is little prospect of that gas helping to alleviate the situation any time soon after the German regulator said last week that no final decision would be made on certifying it in the first half of 2022.

Looking longer term, the battle to include nuclear and natural gas in the EU's sustainable finance taxonomy reaches boiling point this week as the European Commission decides on a delegated act to steer the future of sustainable investments. Mounting political pressure to include nuclear is backed by the Commission's scientific advisor, but Austria has vowed to challenge any inclusion. For gas, inclusion could involve a "transitional" status whereby gas investment would replace that of coal and emit below a "significant harm" threshold of 270 grams of CO2 per kilowatt-hour.

And that takes us to our social media question for the week: Should the European Commission include nuclear and natural gas in any future consideration of sustainable investments? Tweet us your thoughts using the hashtag #PlattsMM.

Steelmakers and metal producers' eyes will be on an Environment Council meeting of EU ministers today in Brussels to assess progress on the EU's "Fit for 55" climate package. The meeting's agenda includes discussion on a recent review of the EU Emissions Trading System and on opportunities for battery recycling, both of which are important elements of the regional move to decarbonize and achieve an orderly energy transition. Many of the region's steelmakers oppose the existing plan to phase out free allocations under the ETS between 2006 and 2030 after the introduction of the region's planned Carbon Border Adjustment Mechanism. They believe this will significantly push up their decarbonization costs.

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

That's it for Market Movers Europe for 2021, thanks for tuning in with us this year, and we look forward to you joining us again in the new one.