In this week's Market Movers: Cool weather in the northern US could drain natural gas stocks, Ontario prepares to announce electric vehicle production plans, crude tanker classes battle it out for trans-Atlantic trade flows, and industry experts travel to New York City for the 35th annual Power and Gas M&A Symposium.
Starting off, frigid weather across the Midwest and the Northeast this past weekend as well as forecasts calling for cool temperatures through the first week of April are promising a rocky start to the gas storage injection season. Over the week ahead, the storage outlook could turn bullish, with a final drawdown from inventory now looking increasingly likely for the final week of March. The unusually cool start to spring could lend additional momentum to the rally in NYMEX Henry Hub gas futures prices, which edged up to around 5 dollars and 50 cents per MMBtu on Friday.
Moving north to Canada – Vic Fedeli, Ontario's minister of economic development, job creation, and trade, said Ontario is preparing to make a string of announcements as early as this week regarding electrical vehicle production and battery supply chains, as the province looks to build its leadership in the EV sector. Fedeli's comments came after an announcement last week from Stellantis and LG Energy Solutions that the companies would jointly develop Canada's first large-scale battery gigafactory in Windsor, Ontario. This brings us to our social media question of the week: With gasoline prices still high, how can EV and other renewable options ease high oil product prices? Tweet us your thoughts.
Turning to crude tanker markets, Aframax and Suezmax freight is set for a bullish start this week as major oil companies engaged in a fixing spree to replace self-sanctioned Russian Urals crude with US barrels. Traders saw rates for the Aframax USGC-Transatlantic run heading toward the worldscale 200 mark, after worldscale 197.5 was booked Friday. However, charterers attempted to stave off those surging Aframax rates by moving to the larger Suezmax tankers late last week. On those larger ships, freight to Europe pushed toward worldscale 95 on a higher cargo size basis. The need for heightened crude exports to Europe could continue for some time as a result of the disruption in exports of Kazakhstan's CPC crude from the Russian Black Sea port of Novorossiisk.
Finally, power and natural gas industry experts, utility executives, and investment bankers will gather for the 35th annual S&P Global Market Intelligence Power and Gas M&A Symposium in New York City on March 30. Achieving the US' COP26 goal of an 80% reduction in carbon emissions by 2030 and 100% decarbonization in the energy sector by 2035 could put billions of dollars of coal and natural gas generation investment at risk. In order to build the 630 gigawatts of wind and 450 gigawatts of solar needed by 2035 to meet this requirement, more than 94 billion dollars of annual investment in clean energy may be needed, S&P Global Market Intelligence data shows. All of that and more at the symposium - we hope to see you in New York City on March 30!
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.