Four scenarios in a gas and energy crisis from investors’ point of view

Europe can no longer expect any gas deliveries from Russia via the "Nord Stream 1" pipeline for the foreseeable future. That became evident on Tuesday, September 6, 2022. Does the continent now face a proverbial “cold winter”? Our experts analyze how potential shortages and rationing could affect different sectors.

  

In this video recording: Analysis of the situation in Europe and in Switzerland

© Vontobel, 6. september 2022, 11.00 Uhr

Recording of the conversation between Dan Scott, Head of Vontobel Multi Asset, and Peter Romanzina, Head Swiss Equity Research.

  

Summary of key topics

Electricity and gas prices are inextricably linked in Europe. Around 17% of the annual electricity needs in 2021 was produced with gas. Gas power plants can easily be connected, particularly during peak times. But that flexibility comes at a price: If gas prices rise, so do electricity prices. This connection is significant when attempting to assess the effect of gas supply bottlenecks in Europe and Switzerland as individual sectors spend more than a fifth of their total production costs on energy.

Learn more about this backdrop and get more details on the sectors in the video. Which approach helps investors identify the winners and losers of an energy crisis?

  

Scenario 1:
Base scenario

  • 15% drop in demand (EU target)
  • Russian gas supplies at the level seen on August 22, 2022
  • Gas storage level falls by some 420 TWh (2019 level)

 

Scenario 2:
No Russian gas supply

  • 15% drop in demand (EU target)
  • No Russian gas supply
  • Gas storage level falls by some 540 TWh by spring (2021 level)

 

 

Scenario 3:
No Russian gas supply, no drop in demand

  • 0% drop in demand
  • No Russian gas supply
  • Gas storage level falls by some 741 TWh by spring (2018 level)

Scenario 4:
No Russian gas supply in a very cold winter

  • 10% increase in demand (EU target)
  • No Russian gas supply
  • Gas storage level falls by some 930 TWh (to nearly zero) by spring

  

  

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