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Market Movers Europe


Market Movers Europe, Apr 9-13: Oil market eagerly awaits reports from IEA, OPEC; biofuels prices eye all-time lows

With George Griffiths, Senior Specialist, Biofuels

April 09, 2018 09:02:30 EST (3:31)

Differentials in the S&P Global Platts Dated Brent crude oil benchmark could receive a boost this week, having hit a two-and-a-half year low last week.


Elsewhere in oil, the IEa and OPEC publish reports on the oil market this week, on Thursday and Friday respectively.


The shipping industry will be keenly watching a week-long meeting of the IMO's Marine Environment Protection Committee in London this week.


In European biofuels, the picture looks bearish, with both ethanol and biodiesel prices loitering just above three-year lows on the prompt.


Switching to the power market, Germany’s offshore wind industry and wider power sector await the result a 1.6 GW tender, expected mid-April.


Finally, senior figures from the metals industry will be gathering in Germany for Platts’ inaugural European Aluminum Conference.


Our social media question for this week: Just how low can offshore wind go? Tweet us your thoughts with the hashtag #PlattsMM.

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Video Transcript


In this week’s highlights: the oil market eagerly awaits reports from the IEA and OPEC; biofuels prices are eyeing all-time lows; and senior figures from the metals industry will be gathering in Germany.


But first: crude. Differentials in the S&P Global Platts Dated Brent benchmark could receive a boost this week, having hit two-and-a-half year lows last week. A heavy maintenance period for European refineries, twinned with lower demand from Far Eastern buyers, has seen the Dated Brent physical differential move to over a dollar discount to the benchmark, the lowest level since November 2015.


The original crude grade of Brent/Ninian Blend traded in the Platts Market on Close assessment process as low as Dated Brent minus $1.35 per barrel last week, a level traders had not seen in several years.


But with many refineries now coming back online, and buyers in China and South Korea likely to be tempted by such low prices, traders anticipate something of a buying spree. That could see the physical Brent differentials climbing again.


Keeping the aim on oil, the International Energy Agency and OPEC publish reports on the oil market this week, on Thursday and Friday respectively. The IEA report is watched closely for the changes in the demand and inventory outlook, and OPEC should give fresh clues on how production cuts are stacking up against its pact with Russia.


For the markets, these reports are set against a looming trade war between the US and China, which is raising fears about the impact on oil demand, and the possibility China could curb US crude imports. Tensions between the US and Russia, with new US sanctions against selected allies of President Vladimir Putin, are fueling the febrile mood.


Staying on choppy waters, the shipping industry will be keenly watching the week-long meeting of the IMO’s Maritime Environment Protection Committee in London. Just as shipping faces cuts to sulphur emissions for bunker fuels from 2020, the EU is pushing for new cuts to carbon emissions, with the threat that it could act unilaterally.


In European biofuels, the picture looks bearish this week—with both ethanol and biodiesel prices loitering just above three-year lows on the prompt. With more imports expected into Europe over the course of the week and ever-growing stock levels, it appears prices could push even lower.


The ethanol market is looking to imports from Guatemala and Costa Rica to further add to the market length, while biodiesel importers expect Argentina to once again bolster Europe’s stock levels. These imports could potentially leave both ethanol and biodiesel prices at all-time lows.


Switching to the power market, Germany’s offshore wind industry and wider power sector await the result a 1.6 GW tender, expected mid-April. A year ago, the first German zero-subsidy bids caused a stir, and March saw the Netherlands follow suit with its first subsidy-free award.


This week’s social media question is: Just how low can offshore wind go? Tweet us your thoughts with the hashtag #PlattsMM.


Finally, something shiny, new and metallic will be coming to Düsseldorf this week. It’s S&P Global Platts’ inaugural European Aluminum Conference. Sanjeev Gupta, the CEO of GFG Alliance, is among the high-profile speakers that will be presenting on Monday and Tuesday. Around 50 companies from 22 countries will be at an event that has taken on sudden relevance, given fresh trade tensions between the US and EU over metals.


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





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