Europe's energy nightmare is deepening

Prices natural gas Europe and the UK have risen sharply again, confirming the region's worst energy concerns. This exacerbates the risk of inflation and recession and depreciates currencies. The immediate cause is cuts in the Nord Stream gas pipeline, which covers most of Europe's needs. It is closed for maintenance until July 21, raising concerns that it may not reopen. Germany moved to tier II of its contingency plan, which is only one tier below rationing. They focus on trying to fill gas storage facilities before the winter spike in demand. This jump in price left US gas and global prices behind oil priceswhich clearly reminds of the local nature of gas markets.

About the author

Ben Laidler - global markets strategist in eToro. Capital investment manager with 25 years of experience in the financial industry, incl. at JP Morgan, UBS and Rothschild, including over 10 years as the # 1 investment strategist in the Institutional Investor Survey. Ben was the CEO of the independent research firm Tower Hudson in London and previously Global Equity Strategist, Global Head of Sector Research and Head of Americas Research at HSBC in New York. He is a graduate of LSE and Cambridge University, and a member of the Institute of Investment Management & Research (AIIMR).

EUROPA

Natural gas provides a quarter of all energy in Europe. Russia's share fell by half to 20 percent. (compared to last year). This is due to the sharp increase in LNG imports from the US .. Higher prices have strengthened the position of major European natural gas suppliers such as Norway's Equinor (EQNR), while to date most integrated utilities and utilities have been well protected or benefited from. . However, as prices rise, so do costs. Governments are introducing windfall taxes and wholesale price caps to protect consumers and the industrial sectors that are the biggest users of gas.

USA

Natural gas provides 32 percent. energy in the USAand its prices (NATGAS, UNG), influenced by oil prices, are down 20 percent. lower than the peaks. However, prices are double the 5-year average, along with solid US demand during the summer months as the cooling down picks up. The international demand for LNG is also high, especially from Asia, and most of all from Europe. This affects the entire supply chain, from drilling companies like EQT Corp. (EQT), to pipelines - like Enterprise Product Partners (EPD), and LNG exporters - like Cheniere (LNG).