On gas prices there are also those who profit
Financial markets/economy
Posted by MoneyController on 29.08.2022
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The current risk of recession in European economies is largely caused by the energy crisis. Rising energy prices (caused in part by speculation) are also one of the most obvious causes of inflation. Difficult months lie ahead for Europe. But there is no shortage of companies that are taking advantage of the current situation, especially outside Europe. 'Financialounge' (in an article by Francesco Rapetti) reported on an analysis by the investment company Schroders.
As Azad Zangana, Senior European Economist and Strategist, points out, energy-driven inflation has fallen to just under 40 per cent: not only is this level still very high, but it is likely to remain so or even rise in the coming months. The situation seems difficult for both households and the productive world. In Germany, there is already talk of rationing for industry, trying to safeguard key production sectors.
Northern European countries, in particular, as Schroders analysts point out, seem to be the most vulnerable to the consequences of the energy crisis in the next two to three months: their greater dependence on Russian gas and the fact that they have not been able to enjoy a tourist season comparable to the countries of Southern Europe puts those states under greater pressure.
One of the problems of the current energy crisis is that natural gas was identified as the solution that could move today's economies from coal-based energy supply to more sustainable forms. This is why Liquefied Natural Gas (LNG) is in such demand around the world from countries like India and China. Europe must hold its own at this point, as it is expected that only after the next 24 months will it be possible to fully obtain alternative gas supplies from countries such as Qatar and the United States.
As stated in the 'Financialounge' article, it is likely that the long-term solution to the current energy crisis will be renewable energies: these are energies that can minimise the environmental impact but are also in some ways easier to handle or start up than a nuclear power plant. While efforts in the direction of the energy transition continue, however, those who stand to benefit most from rising gas prices are the American gas exporting companies. According to Mark Lacey, head of Global Resource Equities at Schroders, the largest US natural gas producers have an advantage in exporting to Europe, as they are concentrated in Texas, Pennsylvania, West Virginia and Oklahoma. Now that the price of Russian gas has risen so much, American gas ($8.90/Mcf) has also become attractive.
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