보기: Market Movers Europe, Jul 19-23: OPEC hikes oil output, extreme weather puts markets to the test

In this week's highlights: OPEC+ green lights deal to hike oil output in a Saudi-UAE compromise; recent flooding in Europe could have implications for power markets as well as the transportation of petrochemicals; and bidding for additional capacity on the TAP gas pipeline closes this week.

But first, in oil, a raise in crude oil production is expected in the coming months after OPEC+ finally came to an agreement over the weekend. Under the deal, the 23-member OPEC+ coalition will ease its production cuts by 400,000 b/d each month starting in August, amounting to a 2 million b/d total increase by the end of the year. The deal also extends the OPEC+ supply management pact to the end of 2022, from its previous expiry of April 2022.

Cautious optimism is growing that the announcement will help relieve a market that analysts say has grown increasingly tight, with global oil demand on the rise due to seasonal factors and the world's continued emergence from the pandemic.

In an appeasement to the UAE, the country will receive a 332,000 b/d boost to its reference production level, from which quotas are determined, starting in May 2022. And that takes us to our social media question for the week: With members such as Iraq suggesting it deserves a higher quota, what levels of compliance are to be expected from other members? Tweet us your thoughts using the hashtag #PlattsMM.

In European power markets, rising river levels will remain a focus for West European traders after the devastating floods in Germany and Belgium last week. In the area to the west of the Rhine and around the Meuse in Wallonia, flooding of power distribution and transmission network substations and cabins cut off hundreds of thousands of households.

While local outages rarely impact near-term wholesale power prices, the threat of extreme weather events has implications for utility costs - promising future price impacts. As you can see from the chart, however, high river and reservoir levels could represent hydro generation potential should river banks burst, driving up stocks ahead of the winter.

In European gas, plans for the expansion of the TAP gas pipeline that brings Azeri gas to Italy will likely be decided as shippers submit binding bids for additional capacity in the key link.

The window for submitting bids for capacity opened on July 17 and it closes on July 20, after which time the system operator will evaluate the bids ahead of capacity contract awards in August.

The 10 Bcm/year TAP pipeline began operations in December 2020 and the operator is considering three expansion scenarios - a limited expansion to 14.4 Bcm/year, a partial expansion to 17.1 Bcm/year, and a full expansion to 20 Bcm/year.

Much will depend, however, on the level of interest from gas companies in using more of the pipeline's capacity.

And finally, in the petrochemical markets, participants will be keeping a close eye on logistics this week, with fears that the flooding along the Rhine river will put additional pressure on already tight truck availability.

Traders reliant on barge transportation last week flagged a surge in truck inquiries due to increasing risk that the Rhine will close for barge loading. With each 2,000 mt barge equating to roughly 90 trucks, barge disruption could see truck costs skyrocket.

Sources in markets with end uses as diverse as packaging, construction and solvents have pointed to fewer wheels on the road due to cross-border quarantine regimes and summer driving holidays.

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