As natural gas prices break records and Moscow sticks to its strategy of "mutually assured destruction" with Europe, investors should keep an eye on it.
Natgas is the most important story to be watching right now. "Look what's happening, where we just keep breaking previous highs," Helima Croft, head of global commodity strategy at Royal Bank of Canada, told CNBC on Monday.
On Tuesday, Dutch TTF natural gas futures were up more than 10% at $277 per megawatt hour, after hitting a record high of $297 the previous day, due to worries about the pause of gas flows to Germany.
European natural gas prices have gone up as the region's energy crisis has intensified. The countries are scrambling to build inventory for the winter.
Before the news of the Nord Stream 1 news, gas supply to Europe was slashed by 20%.
Russia is going for a mutually assured destruction strategy with Europe. We are going to make this terrible for you because you imposed the sanctions on us.
European officials say that Moscow is using its energy exports as a way to retaliate against Western sanctions. The EU ban on seaborne imports of Russian crude oil takes effect on December 5.
An analyst calls the energy crisis in the region scary. A sign of how stretched European gas supply is is that Germany's leading utility has had to restart a shuttered coal-fired power plant.
Europe is going through an economic nightmare.
The question is, where is the natural gas price? There will be industrial shut-ins and rationing. Is Europe going to take action with these sanctions? I think that is the wild card.
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