In this week's Market Movers: A key COP26 decision provides a bullish outlook for carbon markets; the steel industry prepares for official sign-off on the Biden administration's infrastructure package; oil and gas producers await an offshore Gulf lease sale; and generators take stock of current winter heating fuels.

A deal reached at the COP26 conference over the weekend means US carbon credit traders will enjoy firmed-up rules governing credit trading under Article 6 of the 2015 Paris Agreement. And with solidified accounting rules now in place, billions of dollars are expected to flow into new carbon capture or carbon reduction projects. In the US, this is expected to grow both the voluntary carbon markets across the nation and the compliance offset markets in California and in the Northeast's Regional Greenhouse Gas Initiative. Meanwhile, US companies involved in the energy transition are eyeing Congressional negotiations over the Build Back Better Act, which includes several transformative decarbonization investments. A new hydrogen production tax credit, for instance, could help accelerate the US's hydrogen economy to levels seen in Europe.

In oil and gas news, market watchers are paying close attention this week to the offshore Gulf of Mexico lease sale. The Gulf is estimated to contain about 48 billion barrels of undiscovered technically recoverable oil and 141 trillion cubic feet of natural gas. The upcoming sale is not without controversy. In late January, US President Joe Biden signed an executive order to begin halting oil and gas leasing on federal lands and waters. But in June, a US district court ordered an end to the moratorium. While the Gulf sale probably won't break any records, it represents an opportunity for the veteran large players in the Gulf, as well as independents, to shore up their portfolios with fresh acreage. Years of under-investment in the upstream sector generally have resulted in a critical need for investment to assure adequate supplies over the mid-term. And oil prices currently above $80/b provide a major incentive.

This brings us to our social media question of the week: Given the currently elevated oil price environment and recent capex restraint, how large of an increase in offshore production might US markets see in 2022? Tweet us your thoughts using the hashtag #PlattsMM.

President Biden will sign the Infrastructure Investment and Jobs Act at a ceremony Monday. The 1 trillion-dollar package, which has been praised by the US steel industry, includes 100 billion dollars in funding for roads and bridges, 66 billion dollars for passenger and freight rail, 39 billion dollars for public transit, and 7.5 billion dollars for electric vehicles. The bill, which includes Buy American provisions, could increase demand for American steel by as much as 5 million tons for every 100 billion dollars of new investment, according to the American Iron and Steel Institute.

The New York Independent System Operator's staff will present the grid operator's winter 2021-22 Winter Assessment & Winter Preparedness report to the Management Committee on Tuesday.

The report shows the NYISO expects to have a total of just over 42,000 megawatts of power resources available to meet its forecast peak winter demand of around 24,000 megawatts. Operations staff continue monitoring regional fuel supplies which could be limited. Wes Yeomans, NYISO's vice president of operations, said during a recent conference call that the operator is paying attention to northeast fuel supply, that inventories appear to be lower than in the past, and that clearing prices appear higher for this time in November.

Natural gas storage at Southern California utility SoCalGas will likely continue to fill at a fast pace over the second half of November, easing regional winter strips' premiums to Henry Hub. On November 4, the California Public Utility Commission voted to expand the maximum limit at Aliso Canyon Natural Gas Storage Facility in Los Angeles County to 41 billion cubic feet. Aliso Canyon, one of the country's largest gas storage facilities, was previously restricted to a maximum capacity of 34 billion cubic feet after a major gas leak in October 2015. In the week since the decision, SoCalGas inventories have risen to a five-year high on daily injections 10 times greater than those seen in the week before the vote. If injections continue at their current pace, the new storage limit will be reached by the end of November.

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