/NG futures and stocks of NG/LNG producers have broadly doubled in the past month while USO and /CL have been basically flat. I’m curious why the disconnect.
Apologies for do many questions but trying to understand:
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Seems like before the war Russia exported half of Europe’s gas (pipeline and LNG) but only about a quarter of its oil. Is the answer as simple as the shock has been felt much more in gas because of more dependence?
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But Europe is still importing a ton of NG from Russia with earliest talk of a embargo after the second round of the French election on April 24th. So is the run-up mostly speculation about a possible EU embargo (seems it would be difficult to get Hungry on board) or is there an actual current shortage? If there’s a “real” current shortage how is that the case with tons of Russian oil still flowing through to Europe?
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How much of the disconnect is because crude is tightly controlled by OPEC+ who’s happy to keep it around $100 and it’s easier to increase supply of crude (although no appetite to do so at this time)? Are there simply no equivalent of strategic reserves for NG?
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Why does oil tumble 8% every time there’s talk of COVID lockdowns in China without a similar phenomenon in NG? China uses NG rights?
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Media reports are quick to cite unseasonably cold temperatures to blame for run-up in NG but it seems like the obvious thing going on is Ukraine. How does the weather fit into the disconnect?
In short please help me to understand the relative importance of the dynamics at play and most simply why natural gas stocks are going through the sky but oil is staying reasonably grounded.
Thank you very much.
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