European Gas Futures Outlook
We are seeing potential supply worries similar to those in the early 2020s. With the EU looking to phase out Russian LNG faster, we should consider buying European gas futures, especially the front-month TTF contracts. Recent data shows that Russia still made up about 14% of the EU’s total gas imports in the second quarter of 2025, so any disruption will have an immediate impact. This situation is advantageous for US LNG exporters who can fill the supply gap in Europe. We should think about buying call options on major companies like Cheniere Energy and Tellurian for the upcoming quarter. Their stock prices have already gone up in pre-market trading, and a formal EU announcement could accelerate this trend. We need to distinguish between the gas and oil markets, as the report indicates Europe is not targeting Russian crude oil. This keeps a significant supply of oil available, which helps explain why Brent crude futures have remained stable, around $82 a barrel, despite tensions in the Middle East. Therefore, we should be cautious about any optimistic oil trades based on this particular geopolitical situation.Volatility in Energy Options
The uncertainty surrounding the timing and implementation of this EU plan will increase volatility in energy options. Looking back at the sharp price changes of 2022, we know how quickly opinions can change based on news of sanctions. We can prepare for this by buying straddles on gas contracts, betting on a significant price movement once the EU makes a final decision. Create your live VT Markets account and start trading now.
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