In this week's Market Movers Europe with Commodity Associate Dominique Gomez:
- Russian price cap, OPEC+ deliberations
- More French reactors to restart
- Cold boosts coal burn, EU carbon prices
- Petrochemical stock level concerns grow
The EU's ban on seaborne imports of Russian crude comes into effect today alongside the G7 price cap $60/barrel, which was finally settled upon at the end of last week and denies western insurance to tankers delivering Russian oil above this level.
Uncertainties over the impact the cap will have on supplies and the lack of clarity around the demand outlook saw OPEC+ ministers deciding on Sunday's online meeting to roll over quotas.
However, they underscored their "readiness to meet at any time and take immediate additional measures to address market developments."
In power, with the winter's first cold spell, French reactor returns come into the limelight.
EDF has six reactors scheduled to return this week, which should lift nuclear generation above last year's level for the first time this year.
Spot prices could still spike quickly, especially if peak demand coincides with low wind, as seen last week in Great Britain when hourly prices briefly soared above GBP1,000/MWh.
The cold weather is also boosting coal and gas burn, with German coal and lignite output at its highest in two years and reserve plants returning to the market.
This lifted EU carbon allowance prices to a 3-month high with EUAs now trading above UK carbon allowance prices for the first time in 2022.
In petrochemicals, December stock levels face growing pressures this week, as economic woes generated by the war in Ukraine, rising gas prices and high inflation hit both producers and downstream buyers.
With buyers uninterested in absorbing more volumes as the end of year approaches, producers will be looking to exports to relieve stressed supply conditions in the week ahead.
I'm Dominique Gomez, thank you for kicking off your Monday with S&P Global Commodity Insights