Saudi Arabia remains under pressure from the US to keep oil prices low, ahead of the OPEC meeting in Vienna on Thursday. The agenda for OPEC and its allies seemed clear three weeks ago, with a key monitoring committee co-chaired by Saudi Arabia and Russia strongly signaling that the coalition may need to cut production by up to 1.4 million barrels a day. But noises off from US President Donald Trump will complicate the talks.
In the lead up to the talks, Qatari ministers on Monday revealed the state plans to leave the producer group from January 1 to focus on its natural gas production.
Markets will also keep an eye on Russia's willingness to commit to any oil output cuts, when its companies are eager to raise output, as OPEC aims to seal a permanent cooperation deal.
In the steel market, German carmakers will meet with US trade representatives at the White House Tuesday to lobby against possible tariff increases on US imports of cars from the EU. Germany exports around 1.3 million metric tons a year of rolled steel in the form of cars to the US. Egypt is also said to be looking at imposing tariffs on some steel products this week.
While steel makers fear they may be frozen out of the US and Egypt, the European gas market will be looking at the thermostat. Temperatures across Europe are expected to remain above seasonal norms this week, potentially capping gas prices. Further downward pressure on prices might also come from LNG inflows.
In this week's highlights: German carmakers seek to avert higher US tariffs; warm weather is set to cool European gas prices; and the petrochemicals sector will look ahead to 2019.
But first, OPEC will meet in Vienna this week, with its top oil producer Saudi Arabia seeking to stem the recent price drop. However the Saudis remain under pressure from the US to keep oil prices low, as the kingdom struggles to contain the political fallout from the death of dissident journalist Jamal Khashoggi.
The producer group meets Thursday, with Russia and nine other non-OPEC producers joining the talks on Friday.
The agenda for OPEC and its allies seemed clear three weeks ago, with a key monitoring committee co-chaired by Saudi Arabia and Russia strongly signaling that the coalition may need to cut production by up to 1.4 million barrels a day. But noises off from President Trump will complicate the talks. Trump has urged OPEC several times on Twitter and in public statements not to cut output in order to cap prices.
In the lead up to the talks today, Qatari ministers revealed the state plans to leave the producer group from January 1 to focus on its natural gas production. The market is still digesting the impact of the news.
Another factor markets will be watching is Russia's willingness to commit to any cuts, when its companies are eager to raise output, as OPEC aims to seal a permanent cooperation deal.
And that brings us to our social media question of the week: What will be the most likely outcome of the OPEC/non-OPEC meeting? Tweet us your thoughts with the hashtag #PlattsMM.
German carmakers Volkswagen, Daimler and BMW will also be looking for cooperation when they meet with US trade representatives at the White House Tuesday to lobby against possible tariff increases on US imports of cars from the EU. Not only German carmakers but also steel producers are nervous about the prospect of higher tariffs. Germany exports around 1.3 million metric tons a year of rolled steel in the form of cars to the US.
Steel billet exporters from the former Soviet Union and Turkey will be looking East rather than West following market talk that Egypt this week it is set to impose tariffs of 10-15% on imports of some products.
While steel makers fear they may be frozen out of the US and Egypt, the European gas market will be looking at the thermostat. Temperatures across Europe are expected to remain above seasonal norms this week, potentially capping gas prices. Further downward pressure on prices might also come from LNG inflows. Europe is likely to remain an attractive destination as Asian prices are around 15% lower than their European counterparts and their outlook is bearish.
And finally, Valencia will host the European Petrochemical Luncheon Thursday and Friday, and plastics industry participants will be heading to Istanbul for the PlastEurasia conference from Wednesday until Saturday.
At both conferences, the likely focus will be developments in 2019. The Valencia meeting will revolve around aromatics and olefins. In Istanbul, a key topic of discussion will be the likely effect on the economy of Turkish municipal elections due in March.
S&P Global Platts will be present at both events, so get in touch!
Thanks for kicking off your Monday with us, and have a great week ahead.