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Market Movers Europe, Nov 22-26: Cold snap to deepen energy crisis; voluntary carbon markets come into focus

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보기: Market Movers Europe, Nov 22-26: Cold snap to deepen energy crisis; voluntary carbon markets come into focus

  • 주요 내용
  • Silvia Favasuli
  • 원자재
  • Energy Electric Power Energy Transition Natural Gas Oil
  • 길이
  • 04:23

In this week highlights, carbon credits are soaked up by crypto miners; temperatures forecast to drop across Europe and deepen gas price crisis; France sees chances of net power imports as electric heating demand soars; and prices in European oil markets dip as supplies open up.

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In this week highlights, with temperatures forecast to drop across Europe, France sees chances of net power imports as electric heating demand soars, and prices in European oil markets dip as supplies open up.

But first, to the voluntary carbon markets, where the prices of Renewable Energy carbon credits are looking set to continue soaring as a collective of crypto miners going by the name of Klima DAO carries on soaking up older and competitive renewable carbon credits from the market.

Klima DAO, or Decentralized Autonomous Organization, defines itself as an organization of environmentalists, developers and entrepreneurs aiming to use blockchain technology to drive up the price of carbon credits and accelerate the decarbonization of large sectors of the economy.

Platts Renewable Energy Current Year price closed last week at 7.25 dollars per metric ton of CO2 equivalent, up from $4.42 at the start of the month, becoming one of the fastest growing carbon contracts in the market.

Meanwhile, the industry will continue to discuss this week the impact of the implementation of Article 6 of the Paris Agreement on the voluntary carbon market.

Article 6 was historically implemented on November 13 after years of negotiations and is set to jumpstart the evolution of voluntary carbon markets.

And this takes us to the social media question for this week: Will the newly fleshed out Article 6 help attract more players into voluntary carbon markets? Tweet us your thoughts using the hashtag #PlattsMM.

In the compliance markets, meanwhile, prices are again testing record highs, with EU Allowances nearly piercing 70 euros a metric ton at the end of last week, and up nearly a quarter since the start of November.

Momentum looks set to remain bullish for carbon markets, given the situation in the gas market, where attention remains laser-focused on any shift in supplier behavior from Russia's Gazprom and with temperatures in the continent forecast to drop this week.

Gas prices spiked again last week on news of a suspension in German certification of the Nord Stream 2 pipeline, an event guaranteed to deepen antagonism between Russia and the European Union.

Gazprom continues to supply minimum volumes of gas to Europe, and there have been no auctions on its Electronic Sales Platform since the end of October.

In a key sub-plot, German coalition talks enter the final straight this week, which could have implications for Nord Stream 2's future as well as for coal and renewables.

In power, capacity margins are due to tighten with the first cold snap of the winter.

French margins are particularly exposed because of the country's reliance on electric heating, which forms a high fraction of the country's power demand.

Power demand is forecast to hit a nine-month high on Thursday of around 76 gigawatts.

Meanwhile, the return online of some of the country's nuclear reactors has been delayed into December and beyond.

French nuclear availability is forecast at around 45 gigawatts this week. One thing to look out for: will we see the biggest power exporter in Europe turn to a net importer as temperatures drop?

In oil, we've seen prices reacting both to improved supply as refineries come back from maintenance and US shale starts to ramp up, but also to mobility reductions in Europe as COVID case numbers surge in several countries.

Prices have dipped below 80 dollars a barrel in recent days, in line with Platts Analytics' expectations of a slowdown, but partly also on the back of a fairly bearish oil market report from the International Energy Agency.

While European demand is being hit by a pandemic resurgence, mobility levels continue to recover elsewhere in the world.

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.

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