In this week's highlights: Oil markets are beset with uncertainty over Iran and Russia, the S&P Global Platts London Energy Forum kicks off, the UK power capacity auction is expected to deliver gains, and European container markets clear backlogs on account of low arrivals from Asia.
- Brent tops $100/barrel, Iran deal hopes rise (00:11)
- Another payday for UK generation looms (01:33)
- Container market eyes lull to ease logistics issues (02:23)
In this week's highlights: the S&P Global Platts London Energy Forum kicks off on Monday, the UK power capacity auction is expected to deliver gains, and European container markets clear backlogs on account of low arrivals from Asia.
But first, to oil, where markets are beset with uncertainty over Iran and Russia, with hopes of a nuclear deal that would allow Tehran to resume exports putting a dampener on prices, but tensions over Ukraine injecting a hefty risk premium.
Indeed, tensions surrounding the situation in Ukraine, combined with demand for light sweet crude from the North Sea helped push the Platts Dated Brent crude benchmark up over the $100/b mark for the first time in over seven years last week.
Providing perspectives on these and other pressures are two big events: the Platts London Energy Forum on Monday, and the Energy Institute's International Energy Week conference, which starts Tuesday.
The Platts event will provide insights into the big themes running through markets, including energy transition and the rise of low-carbon crude as a sought-after new feedstock, as well as developments in benchmarking.
Meanwhile, top speakers at International Energy Week include the CEOs of two of Europe's largest oil producers: Eni's Claudio Descalzi, and TotalEnergies' Patrick Pouyanne, as well as UK Secretary of State for Business, Energy & Industrial Strategy Kwasi Kwarteng.
And that takes us to our social media question for the week: Do you think low-carbon crude will help meet emissions reduction targets? Tweet us your thoughts using the hashtag #PlattsMM.
In power, expectation is growing that this week's four year ahead capacity auction in the UK will deliver another decent pay day for the country's generators, storage providers and demand response providers.
As you can see in the chart, last week's one year ahead auction paid out the maximum 75 pounds per kilowatt, clearing in the first round due to insufficient pre-qualified capacity. The trend is up in auctions to date because almost all the UK's coal plants are now closed, an ageing nuclear sector has also delivered early retirements, and the UK's older gas plants are in a position to set the price.
Meanwhile, wind power association WindEurope is to provide a five-year outlook for new capacity on Thursday, and Ukraine is to test desynchronizing from the Russia-Belarus power network as part of plans to link into the European system.
And finally, the container market in Europe is expecting a lull in imports from North Asia over the course of the week. This is due to a gap in arrivals of new ships owing to the Lunar New Year at the start of the month. As a result, ports across the UK and North Continent are expected to use this time to clear some of the backlog of containers that has built up owing to a dearth of chassis and railcars to move goods inland from the ports themselves.
Some market participants have said they expect a slight downward correction in rates going forward as demand cools compared with the latter half of 2021. The Platts Container Rate 1 from North Asia to North Continent was assessed at $14,500 per forty-foot equivalent unit in mid-February. However, this reflected an increase of over 75% on the year.
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Thanks for kicking off your Monday with us and have a great week ahead!