”This includes Europe’s new scramble to meet domestic energy demand amid a combination of colderthan-average winter weather and depressed solar and wind power generation. While tame compared to their 2022 energy crisis levels, European natural gas prices have risen about 50% since September and are four times higher than in the U.S., raising concerns about the continent’s already fragile economic situation. However, global oil and gas investment appears sufficient to meet demand for both fuels this year and through 2030. Thus, absent major supply disruptions, oil and gas prices are unlikely to persist at levels that endanger the current global expansion. Europe’s plight is mostly idiosyncratic, underscoring its unreliable energy mix, structurally higher energy prices than in the U.S. and China, and related competitive disadvantages. This, no doubt, is part of why European Equities trade at a historically deep discount relative to their U.S. peers.”
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Morten W. Langer
