Time To Fade The EU Energy Crisis
European commodity and energy prices have destroyed the confidence of Europe's businesses and households. From now on things will become better again.
Goldman Sachs said on Monday that European energy prices will remain on elevated levels for longer, I tend to disagree this time in this particular case. The price action we see in Europe has less to do with the general cyclical commodity bull market thesis I stand for but more with fear and excessive speculation. I should also make at the beginning the important cut between US and European energy prices. Moving forward this fear in Europe will fade and so will natural gas, coal and electricity prices priced over here in euro. The current price levels are astronomically high and not justified by the fundamental data. A clear divergence is visible.
Just to highlight how high certain prices are, I overlayed the cost in USD per BTU for crude oil ($93), TTF natgas ($500) and Henry Hub natgas ($54).