Energy markets calmed by stabilising energy prices! 📈 📉
European equities have been one of the better-performing markets in 2023 as fears have receded about the need for energy rationalisation. A milder-than-expected winter gave some respite to strained energy relationships, allowing stockpiles to be replenished and boosting sentiment towards equity markets.

What does this mean for investors? 🤔
Russia’s invasion of Ukraine had put energy relationships in a state of flux, but the past few months have stabilised the situation. A milder winter allowed the EU to rebuild gas reserves and many leaders have accelerated liquified natural gas (LNG) projects, boosting Europe’s reliance on this commodity. Fears over energy security have been subdued and has given confidence to European equity investors.

However, like all commodities, energy prices are subject to change, and investors should be wary about the impact of future seasons.

Ian Jensen-Humphreys explains:
“We would be concerned that the current benign situation could easily worsen, should the weather be less accommodating for the rest of 2023. The EU has acted to try to encourage and speed up alternative renewable energy sources, but it is likely to take years to materially wean the continent off its fossil fuel dependency.”

May 2023 - Between the lines.

Key takeaways
– Energy security concerns in Europe have eased.
– Liquified natural gas (LNG) projects have been accelerated.
– Equity investors have taken confidence from EU leaders’ work to support markets and energy prices