European Natural Gas:

Heading for a Winter Crunch?

September 22, 2021

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Key Takeaways

  • The recent surge in European natural gas prices is far ahead of our expectation, driven primarily by robust Asian demand and moderating supply.

  • We believe some of the tailwinds will taper off over the next few months, but record-low gas inventory level in Europe ahead of the peak winter season places the market in a vulnerable position.

  • We believe Equinor and OMV are well-placed to benefit from strong European gas prices, but we favor Repsol due to its relatively cheaper valuation and leverage to global gas prices.

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