Recently, gas prices have climbed after Russia stopped exports to Poland and Bulgaria due to the fact that the two countries refused to pay for gas in rubles. Countries have traditionally paid for Russian gas in dollars or euros, however, Russian President Vladimir Putin has demanded that countries now pay for gas in Russian currency.
On its own, this move is unlikely to have a major impact on European gas supplies. However, investors fear Russia’s actions could extend to larger European countries such as Germany and Italy. If this was to happen, gas prices could sky-rocket higher.
Europe has announced a plan to dramatically reduce its reliance on Russian natural gas by the end of 2022. The plan involves finding alternative supplies of gas in the near term and boosting energy efficiency, while focusing more on renewable energy in the medium to longer term. This could potentially have an impact on gas prices, however, most experts agree that the plan is very ambitious and will come with plenty of challenges. Those bullish on natural gas prices may wish to consider gas stocks such as Antero Midstream Corporation, Cabot Oil & Gas Corporation, and CFD positions in natural gas.