Tensions over global trade are likely to remain at the top of the agenda, after the US on Friday levied an additional 25% tariff on $34 billion worth of imported Chinese goods.
In Europe, markets will digest the European Commission's provisional safeguard measures on steel.
US President Donald Trump is heading to the region for a NATO summit Wednesday. That will be followed by a visit to the UK on Friday, and a summit with Russian President Vladimir Putin in Finland next Monday.
In oil, market participants will scrutinize reports by OPEC and the IEA on the state of markets.
Mark Pengelly looks at these and other key factors that could move European commodity markets this week.
In this week's highlights: the oil markets look out for key reports, power markets are feeling the heat, and US President Donald Trump will begin his visit to Europe.
But first: Here in Europe, markets will digest the European Commission's provisional safeguard measures on steel. The EC's tariff-rate quota plan comes in response to earlier US tariffs on steel and aluminum imports. It calls for tariff-rate quotas based on traditional import levels. Additional duties will be levied once those levels are reached.
The EC says the safeguards are necessary to prevent US tariffs diverting cheaper material into the European market. But metals trade groups and free-trade advocates are lobbying against such a move. They argue import-reliant supply chains will be disrupted and domestic prices could increase. However, the measures received the support of member states late last week, and will come into force once formally adopted later this month.
That brings us to our social media question: What impact will trade tensions have on European markets? Tweet us your thoughts with the hashtag #PlattsMM.
In oil, market participants will scrutinize two monthly reports on the state of markets. The reports, by OPEC and the IEA, will be published on Wednesday and Thursday. A particular focus will be the crisis in Libya, where a dispute between military leader Khalifa Haftar and the authorities in Tripoli has shut down a chunk of the country's oil exports. That has tightened European supplies.
Meanwhile, power traders will be keeping a close eye on the weather.
Hot weather often comes with low wind and reduced hydro power, increasing demand for gas-fired generation. Germany's Rhine river is approaching critically low levels, with coal barges forced to reduce their loading capacity. Nordic summer power prices have also risen to six-year highs, with dry and hot weather across Scandinavia increasing the hydro deficit—now at multi-year highs.
What's more, the sizzling sun looks set to continue: the map on your screen shows the extent to which temperatures across Europe are expected to deviate from the average this week. Despite a forecast dip in temperatures, the current heatwave conditions could well stretch into August.
In the petrochemicals industry, Europe's plant maintenance season is drawing to a close. With plants coming back on line, the market for most products is seen as long — a situation that is expected to continue.
Prices for ethylene, the building block for the largest set of petrochemicals, have turned bearish, with spot product trading at a double-digit 11% discount to contract prices. In the longer term, the maintenance of some major plants, planned for August and September, could tighten supplies for some products.
And finally, it will be a week of busy diplomatic activity, as US President Donald Trump heads to Europe for a NATO summit Wednesday. That will be followed by a visit to the UK on Friday, and a summit with Russian President Vladimir Putin in Finland next Monday.
Trump has been ratcheting up pressure on major oil producers to make up for supply shortfalls—and in particular, the shortfall from Iran as Washington reinstates sanctions. Trump may glimpse one non-OPEC supply source, the North Sea's ageing oil platforms, as he plays golf on a trip to Scotland at the weekend.
Thanks for kicking off your Monday with us, and have a great week ahead.