Russia has told ‘unfriendly’ foreign countries that they need to start paying for gas in roubles or else it will cut their supplies. Although the payments for gas will not be paid by European buyers until mid-May, the anxiety this creates around the gas market may start to be felt into the run up for those payments. Russia’s liquefied natural gas exports have stayed strong despite the invasion of Ukraine. This is because European buyers are highly dependent on Russian gas supplies and European Govt’s are struggling to quit natural gas imports. However, if Russia makes it difficult for Europe to access natural gas we may see another energy price spike higher.

Natural gas also has a strong seasonal pattern place seeing gains in 11 of the last 14 years between April 01 and May 14. The largest gain was in 2008 with over 18% in profit. The average loss was only around 2% and the average return was 4.06%. Does this mean that natural gas can gain again this year? Will Russia cut supply and cause prices to surge to add an extra tailwind into this seasonal pattern?

Major Trade Risks:

  • If Russia withdraws its requirements for ‘unfriendly’ nations to pay for their natural gas in roubles.
  • If there is an end to hostilities in Russia & Ukraine.