Alerian : “Natural gas prices could move even higher despite already hitting record highs in Europe ahead of rising winter demand.
Stacey Morris, Director of Research at Alerian
Stacey Morris, Director of Research at Alerian, said: “Several factors have contributed to low inventory levels and the spike in natural gas prices in Europe, including lower volumes from Russia and strong demand for LNG globally leading to fewer spot cargoes being available.
“It makes an interesting backdrop for the upcoming COP26 meeting in Glasgow. The spike in natural gas prices is already having an impact with US fertilizer maker CF Industries shutting down two factories in the UK and high natural gas prices could have a negative impact on economic recovery as energy costs create headwinds for industrial activities.
“The Alerian Midstream Energy Dividend Index (AEDW), the underlying index for the Alerian Midstream Energy Dividend UCITS ETF (MMLP) which is managed by HANetf, includes energy infrastructure companies in the US and Canada that help facilitate LNG exports. Over 70% of the index by weighting is primarily focused on infrastructure serving natural gas. Midstream energy infrastructure offers attractive investment characteristics, including generous income highlighted by a yield above 7%, as well as real asset exposure and diversification.”.
Hector McNeil of HanETF, which manages the Alerian Midstream Energy Dividend UCITS ETF, added “Regulator OFGEM is warning that rising gas prices will affect UK household bills. A key electricity cable between the UK and France was shut down this week which has pushed up wholesale energy bills and E.ON UK’s chief executive Michael Lewis is urging the UK Government to get rid of levies subsidising renewable energy in order to help reduce rising energy prices as the green levies account for around a quarter of household bills.”