The European Energy Crisis Hiding in Plain Sight

Few investors are gifted with foresight. 

If everyone knew what the future foretold, investing would be a much different game than it is today. Unfortunately, most of the investment herd today is reactionary and waits until the shit has actually hit the fan before acting. 

I’m not telling you anything new, dear reader, because it happens all the time around us. 

Just ask yourself how many investors were preparing for record-high gas prices at the pump this summer.

We knew this would be a summer of exorbitant oil and gasoline prices more than a year ago, ever since COVID lockdowns started easing and it was clear just how tight future supply/demand fundamentals would become. 

But again, this isn’t a new phenomenon. 

Years ago, when the Bakken oil boom was in in full swing in North Dakota, investors like Warren Buffett foresaw the bottleneck in transporting that flood of oil to market would be a boon for rail companies, especially when the state’s pipeline infrastructure hit full capacity. 

In hindsight, people hailed his purchase of Burlington Northern Santa Fe Corp. (BNSF) as a brilliant move by the Oracle of Omaha. 

And it was.

The European Energy Crisis Hiding In Plain Sight

Today, I’m going to give you that same gift of foresight. 

What you do with this knowledge is completely up to you. More importantly, I’ll tell you exactly how you can take full advantage of it NOW.

Europe is on the verge of an energy crisis. 

Now, I understand that this isn’t shocking to my veteran readers. It shouldn’t even be very surprising to you either given the Russia-Ukraine war that has dragged on since the beginning of this year. 

But no matter how obvious this is to us, most people have no idea how serious the situation is right now. 

To tell the whole story would take far more hours than we have today, so let's lay down the basics.

I have no doubt that you’ve heard of Europe’s natural gas woes since Putin rolled his tanks across the Ukrainian border. 

At first, things didn’t seem too troubled. After all, the war was only expected to last for a short period. Five months later, and some Europeans are starting to get a little anxious. 

They now find themselves in the middle of the summer, with a very real possibility that they won’t have enough natural gas supplies to last next winter.

Some European countries like Germany find themselves in a lose-lose situation. It turns out that sanctions on Russia’s oil and gas industry are causing some unintended troubles. 

Just a few days ago, Putin said that gas flows from the Nord Stream 1 pipeline were down to 40% of capacity after there were some delays in servicing a turbine in Canada. Due to those sanctions, the turbine was unable to be returned. 

This short-term issue may have been resolved, but we’re far more concerned with what’s coming up.

Remember, this is the time when Europe should be building its stockpiles of natural gas, which are currently only about 64% full. 

That makes the next few months incredibly important. 

In fact, the International Energy Agency warned the EU that those gas storage levels would need to hit 90% for member countries to avoid disaster should Putin decide to cut gas supplies to Europe. 

Like I said, it’s a crisis that’s hiding in plain sight.

What you may not realize is where Europe will turn for new gas supplies. If Putin’s war in Ukraine has taught the EU anything, it’s that Europe can no longer rely on Russia for such a vital natural resource. 

Fortunately for Europe, there’s a vast amount of it right across the pond. 

Truth is, we’re already picking up Russia’s slack. 

And for the first time in history, the U.S. is now supplying more natural gas to Europe than Russia. 

It’s all thanks to U.S. LNG. 

The best part is that Europe's going to want more of our natural gas going forward — a lot of it!

The EU just agreed to ban all Russian oil imports by the beginning of 2023, as well as two-thirds of its gas imports, although it'll never agree on an all-out ban of Russian natural gas due to some countries (we’re looking at you, Germany) being too reliant on Putin for gas.

If oil stocks were the best-performing energy stocks as crude prices ran to $120 per barrel this year, mark my words now — natural gas will be just as hot come winter.

Until next time,

Keith Kohl

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A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.

For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.

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