If Russia invades Ukraine any possibility the Nord Stream 2 pipeline will be approved by Germany near term would evaporate thereby exacerbating the severe energy crisis in Europe. Europe’s Natural Gas storage this year dropped to its lowest seasonal levels in more than ten years, which sent their Gas and Power prices soaring.
In response, the amount of Liquefied Natural Gas (LNG) exported from the US to Europe set a monthly record in January, reaching the highest amount for this month since records began in 2011. And plans are already in motion to further increase our LNG exports to Europe if Russia invades Ukraine.
Therefore, with Natural Gas supplies already projected 16% below the 5-year average within the next 4 weeks, what do believe would happen to Natural Gas prices if Russia invaded Ukraine and we draw down our supplies at a more rapid pace to increase LNG exports to Europe?
If you believe as I do, Natural Gas prices would likely increase, then if you have not already hedged your cost of Natural Gas and Electricity, it would be wise to consider doing so at this time.
As I explained In my Dec 6th, 2021, Energy Update, early in the 21st century, we experienced higher Natural Gas prices and volatility prior to fracking giving us sufficient supplies to meet our energy needs, but over the last 10 years, we were blessed with a period of lower prices and volatility with fracking giving us enough supplies to meet our energy needs.