Volume on this rebound has been considerably weaker, suggesting that this may be a rebound rally only and another downswing could follow. What stands out here is that volume rose into the highs in April/May, then rose more into the sell-off in June. Note the EU Dutch Hub NG is also below its recent high. However, as this chart shows, NG is still shy of its recent high. Rising natural gas prices are also hitting here as well, as the chart below attests. All of this has helped produce an EU energy crisis. Russia and Iran hold 41% of all the global reserves of NG. Russia and Iran also have the world’s largest reserves of natural gas, far surpassing number three and four: Qatar and the U.S. exports go to Mexico and Canada while Canada exports its gas entirely to the U.S. do export NG, but it ranges between 23% and 31% of total production. and Canada are over here while the EU is over there, and facilities and ability to ship North American NG to the EU are severely limited due to a lack of LNG facilities.
is the largest and Canada is fourth largest. The reality is Russia, followed by Iran, are the world’s second and third largest producers of NG. That compares to the 100% price increase seen for North American NG. All of that could create even more instability.ĮU Natural Gas Dutch Hub 2021–2022 Source: Natural gas (NG) prices at the Dutch Hub have jumped 120% since the beginning of the year. There have also been rumblings of key departures at the ECB. There has been talk of Italy leaving the euro. The fear is that the eurozone’s third largest economy could plunge into political instability at the wrong time, triggering a possible sovereign debt crisis. Italy is the most indebted country in the EU with a national debt to GDP ratio last at 150.8%, the highest in the EU except for Greece. Italian PM Mario Draghi tried to resign and was blocked, but is now resigning again. In 2021, Russia supplied 40% of the EU’s natural gas and 25% of its oil. initiated the sanctions but the EU suffers the most because of their high dependency on Russian oil and gas, particularly gas. There is wavering, as Germany has noted that if they don’t get those turbines they need from Canada, they could cut off all aid to Ukraine.
It’s become almost like a war of attrition-whoever is willing to suffer the most in order to support the sanctions against Russia. Inflation Rate 1997–2022 Source:, , The EU has been hit hard by the economic fallout from Russia’s invasion of Ukraine. What’s worse, many EU rates have been negative so raising them even to 0.5% could prove to be a shock to the financial system.ĮU and U.S. But it’s most likely too little too late. The European Central Bank (ECB), the EU’s equivalent of the Fed, is only now finally starting to increase interest rates. The leader in the G7 is the United Kingdom at 9.4%. The EU’s inflation is actually the highest in the G7, although officially the EU is not a member of the G7. The eurozone inflation rate (the eurozone is those countries that use the euro) is 8.6%.
The EU’s inflation rate hit 9.6% in June.
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