Ukraine 2: A Song of Ice and..Ice

As winter nears, I think we should start to consider how the war in Ukraine will affect gas and heating in Europe this coming Winter.

Some research questions I’m thinking of:

What does weather forecasting show for Europe this winter? Will it be a colder than usual Winter? Warmer?

Does Europe have enough heating oil and gasoline to weather the Winter? What about a colder than average Winter?

When will demand for these goods spike?

Where will Europe’s gas and oil come from? Will there be increased exports from the United States or another country? If so, how will the oil get there? Will this increase demand for domestic oil transportation by rail or truck and ocean transportation?

How will Winter affect Ukraine? Do Russia and Ukraine have enough supplies for Winter? Do they have the logistics to equip their soldiers with these kits? There have been reports of Russia providing its soldiers with old, broken equipment and expired field rations. Will this have a more dramatic effect in Winter? Will either of these countries be able to press an advantage in Winter and will that play out on the markets somehow? (A Russian victory and an end to the conflict or Ukraine pressing an advantage which may cause Russia to lash out?)

There’s a ton more. Let’s start coming up with additional angles and compiling information with the goal of identifying at least two plays we feel confident about. If demand for oil is going to spike, we could be positioned in calls first.


Shadowstars posted some good charts in the nuclear thread, but I’ll re-post them here for reference…

I also seem to recall reading news that Germany is going to be firing up some coal power plants? Will need to look for actual info though.

Also a good chart from some article I was reading:

Finally, a good video to watch from some French PBS network (it’s in english).

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Coal stocks have been ripping lately. They may have room to grow still. I know alot of hedge funds won’t touch them due to ESG concerns.
Article on Germany refiring coal plants
Small primer from

Newcastle coal futures, the benchmark for top consuming region Asia, were trading above the $400-per-tonne mark and just shy of a record peak touched in early March amid robust demand and persistent supply disruptions exacerbated by the war in Eastern Europe. The International Energy Agency sees coal consumption in Europe rising by 7% in 2022 on top of last year’s 14% surge, with the continent now turning to seaborne coal from South Africa, Indonesia, and even as far away as Australia as it halts imports from Russia. Demand for coal in India, the world’s second-biggest coal importer behind China, is expected to rise almost 10% in 2022 as the country’s economy expands and electricity use increases. Markets were tight even before the invasion as soaring natural gas prices in Europe and Asia in late 2021 intensified gas-to-coal switching in many countries……Coal is expected to trade at 441.56 USD/MT by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 527.10 in 12 months time.

Equinor has been a solid performer as well. They are the Norwegian state oil company and are now the largest exporter of natural gas to Europe. They have been aggressively buying back shares and their stock price has responded with a slow and steady rise. If natural gas prices in Europe continue to elevate into the winter, they stand to benefit. From their website:

Equinor is the largest gas producer on the Norwegian continental shelf, and the second-largest gas supplier in Europe. The combined gas volumes from Equinor and SDFI (the Norwegian state’s gas volumes) constitute more than 20 per cent of the gas market in Europe…In the USA, Equinor has shares and production in three premium shale oil and gas plays: Marcellus, Eagle Ford and Bakken. Gas is used for energy production, heating and industrial purposes. Through transport agreements to New York City and Toronto, residents can keep winter temperatures at bay with shale gas from the Marcellus field…Through commercial negotiations with our counterparts, we have modernised most of our long-term contracts, and gradually moved away from oil indexing. The price of gas is now directly linked to the price in the market places.


Here’s a very bullish take for US LNG with some solid mentions like ConocoPhillips. There’s a lot of desire from Europe to acquire more US LNG but middlemen and Chinese buyers are also very interested.

Here’s a brief opinion another the energy situation in Europe better:

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Nord Stream 1 is down for maintenance between Aug 31 and Sept 2. Some expect it will not be turned back on. This is maintenance on the Russian side and not Nord Stream.

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Situation in Germany may not be as clearcut as expected


To copy some discussion from TF over:

@derfam mentioned his mother is on a fixed income and has flat rate energy charges. her energy costs will be going from 70 squiggly lines per month to 400 squiggly lines per month.

@Kryptek suggested puts on EU ETFs and offered up this list - To add, can anyone think of some public companies traded on a US market with heavy Euro exposure? Something consumer discretionary maybe.

@TheHouse pointed out:

Is there maybe a European airline carrier we should be looking at?


I read something like this on 5rivers, I think everyone is thinking the same thing

Coming to Calfornia in a decade unless nuclear goes nuclear btw… either insanely subsidized electric energy or a renaissance in nuclear. I like the fission work, but not commercial ready yet. With recent news Japan also going Godzilla, long uranium plays too.

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WSJ article that I think caused the nuclear pump today:

OK so we’re thinking short the whole continent of Europe, long Uranium. Does anyone have thoughts on particularly juicy tickers for either?

We all know there can be only one… LMT

URA is a uranium ETF and CCJ both were up a lot today

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CCJ and NXE are the main ones to go for Uranium. And maybe LTBR for the tech.

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