EU natural gas futures gained momentum to trade above €122 per megawatt-hour on Thursday, after closing at a near three-week high of €119 in the previous session, as fears over supplies were reignited.
Europe’s largest supplier, Russia’s Gazprom, said it was exploring options of cutting off gas supplies amid issues concerning the payments in rubles after European importers declined to pay with the Russian currency.
Germany has recently agreed to a contract with Qatar for the supply of liquefied natural gas (LNG) that will help the European country reduce its reliance on Russian energy – albeit a long-term solution that will not ease current supply issues. On Wednesday, Europe's largest economy set an emergency plan in motion to secure gas supplies, preparing for a possible pause in Russian exports.
US Gas futures surge on reignited supply fears
On the other side of the Atlantic, US natural gas futures gained +20%, as strong overseas demand is keeping the inventories low, and the cost of other energy commodities remains elevated.
US LNG exports are at record highs as Europe tries to replace Russian supplies due to the war in Ukraine. Last week, President Biden and European Union agreed on a new gas deal to secure an additional volume of LNG for gassed-out continents.
American Investors: How to invest in Natural Gas
Investors domiciled in America can gain exposure to natural gas futures through ETFs such as:
For leveraged and/or inverse ETFs investors:
- ProShares UltraShort Bloomberg Natural Gas (KOLD)
- ProShares Ultra Bloomberg Natural Gas ETF (BOIL)
- Horizons BetaPro Natural Gas 2x Daily Bull ETF (HNU)
- Horizons BetaPro Natural Gas -2x Daily Bear ETF (HND)
For gaining exposure to Natural gas equities through ETFs such as:
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