In this week's Market Movers: BP is due to publish its annual statistical review; and nerves are fraying in the petrochemical market over a PET shortage ahead of the peak summer demand season.
Both oil traders and football fans will turn their attention this week to Moscow, where the Russian and Saudi Arabian teams will clash in the opening match of the World Cup tournament on Thursday. And both nations' respective energy ministers are also expected to meet to discuss the future of the OPEC/non-OPEC production cuts deal.
This leads us to our social media question: Will those pushing for higher output score, or will the cuts deal be saved on the rebound? Join our conversations on Twitter - use #PlattsMM and connect with us.
There will be a flurry of new market analyses, both short- and long-term. OPEC publishes its monthly oil market report on Tuesday, and the IEA puts out its own version on Wednesday.
The World Cup is also a point of interest for the petrochemical markets, with an expectedboost in demand for plastic drinks bottles. Meanwhile, the European petrochemical industry has concerns over suspicions of anti-competitive practices in the styrene market.
In Brussels, this week, there will be talks between the European Commission, national governments and the European Parliament on renewable and energy efficiency targets for 2030. Meanwhile, the biofuels market will be monitoring those same EU trialogue negotiations for clarity on feedstocks.
And finally, metals executives from across Europe will descend on Barcelona for the S&P Global Platts Steel Markets Europe conference, with US tariffs and global countermeasures top of the agenda.
Video Transcript
In this week's Market Movers: BP is due to publish its annual statistical review; and nerves are fraying in the petrochemical market over a PET shortage ahead of the peak summer demand season.
But first, both oil traders and football fans will turn their attention this week to Moscow, where the Russian and Saudi Arabian teams will clash in the opening match of the World Cup tournament on Thursday. President Vladimir Putin and Crown Prince Mohammad bin Salman are due to watch the game together, and their respective energy ministers are expected to meet on the sidelines. At stake is the future of the OPEC/non-OPEC production cuts deal—with oil prices hovering near 80 dollars a barrel and looming Iranian sanctions increasing pressure to raise output.
That’s our question for social media this week: Will those pushing for higher output score, or will the cuts deal be saved on the rebound? Answer via Twitter with the hashtag #PlattsMM. Another focus for oil watchers will be a flurry of new market analyses, both short- and long-term. OPEC publishes its monthly oil market report on Tuesday, and the IEA puts out its own version on Wednesday.
Also on Wednesday, BP will publish its annual Statistical Review, something of a bible for the oil industry. The World Cup isn’t just a focus for OPEC watchers this year—it’s also a point of interest for the petrochemical markets. The tournament is expected to boost demand for plastic drinks bottles. All those thirsty fans are set to add to the summer peak demand season, which this year may be threatened by a severe shortage of the bottle-making material, PET, for spot delivery.
The European petrochemical industry has other things to worry about too—namely, suspicions of anti-competitive practices in the styrene market. Last week, the European Commission said it had carried out unannounced inspections of several key purchasing companies. On Friday, the commission said it was concerned about a potential violation of antitrust rules. It said the raids were a preliminary step in its investigations.
The carbon market too will be closely watching the EU. There will be talks in Brussels between the commission, national governments and the European Parliament on renewable and energy efficiency targets for 2030. The new Spanish and Italian governments might add an extra element of uncertainty. Targets above 30% will mean fewer carbon emissions and lower carbon prices in the long term. But as you can see from the chart, some price volatility could be immediate. On May 31, EU carbon prices saw their biggest single-day drop in more than a year due to fears of a US-EU steel trade war. They then rebounded within two days. Depending on the outcome of the talks, more volatility may lie ahead.
The biofuels market will be monitoring those same EU trialogue negotiations for clarity on feedstocks. Companies are eager to know which feedstocks will count as waste and what the minimum blending obligation for advanced biofuels will be. The talks should produce a final decision on whether palm oil will be banned as a feedstock after 2020—something that would potential kill imports from Southeast Asia indefinitely.
And this is a live issue in France as I speak. Farmers in France are reported to have started blockading refineries and fuel terminals on Sunday evening as a protest against the use of palm oil as a biofuel feedstock at the La Mede refinery.
And finally, metals executives from across Europe will descend on Barcelona for the S&P Global Platts Steel Markets Europe conference. US tariffs and global countermeasures will be at the top of the agenda, but discussions will also focus on managing price volatility, mergers and acquisitions, as well as carbon emissions.
Thanks for kicking off your Monday with us and have a great week ahead.