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Energy Crisis: The Best Way to Profit from Rising Costs

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Yesterday, I looked at the main driver of the energy crisis in Europe right now – uncertain natural gas supplies.

It’s largely down to Russia’s ongoing war in Ukraine and the tit-for-tat sanctions and counteractions between Russia and its European neighbors.

Hopefully, Europe and Russia can find a way to de-escalate the situation. Although, if Putin’s threats to mobilize more troops and the country’s nuclear weapons are to be believed, I’m not holding my breath…

But people living in Europe are already feeling the effects of escalating energy prices. As I told you yesterday, natural gas prices in Europe spiked by as much as 312% since the war started.

Governments in Europe are scrambling to secure alternative energy supplies as the cold winter approaches while trying to agree on a set of measures to limit Russia’s oil and gas income.

And we haven’t been immune on this side of the Atlantic, either. According to the latest U.S. Consumer Price Index (CPI) data, natural gas prices here are 33% higher than a year ago.

So today, I’ll show you how you can make some of that extra spend back as energy prices continue to rise.

But first, a look at what’s coming next in the energy crisis…

(Russian) Winter Is Coming

During the summer, the European Union (EU) announced plans to ban seaborne imports of Russian crude oil from December 5. And it said it will impose a ban on petroleum product imports starting on February 5 next year.

If and when these bans are implemented, they will have a knock-on effect on all energy prices across the globe.

But there’s more…

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Recently, the leaders of the EU and other G7 nations decided to try to limit Russia’s oil revenues. They proposed a price cap of between $40 and $60 a barrel on Russian oil. This would also come into effect on December 5.

The Group of 7 – or G7 – comprises Canada, France, Italy, Germany, Japan, the United Kingdom, and the United States.

To say that Russia doesn’t like these proposals would be putting it mildly.

Russian President Vladimir Putin said he will make Europe freeze and turn off the gas valves to any country that imposes price caps.

It remains to be seen whether he makes good on his promise if a price cap is imposed. After all, Russia is no stranger to empty threats.

For example, about six months ago, it demanded that all payments for natural gas be made in its local currency, the ruble, or it would cut supplies. This was to prop up its then-falling currency.

The EU countries refused. This caused a spike in natural gas prices.

In the end, however, Russia backed down… silently. Why? Because it couldn’t afford to cut off the flow of those juicy gas dollars.

It’s very hard to predict how this will play out. If Russia’s war in Ukraine has shown us anything, it is that Putin can be unpredictable.

And the EU and G7 must tread a fine line between forcing Russia to abandon its “special operation” in Ukraine and keeping the lights on in Europe and around the world.

Heads of government from almost every country in the world have gathered in New York this week for the 77th United Nations General Assembly. The energy crisis and the situation in Ukraine are top of the agenda.

Unsurprisingly, Vladimir Putin is not in attendance, although he has sent his foreign minister to the event.

Energy Prices Will Continue to Rise This Winter

The way things currently stand, the rise in natural gas prices is unlikely to be fully resolved in the short term.

And it’s destined to build into a crisis here this winter.

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According to the U.S. Energy Information Administration, we generate 38% of our electricity from natural gas.

When the weather gets colder, demand for natural gas-fueled electricity will rise. And in general, colder weather increases demand for natural gas for heating. This is true in both the residential and commercial sectors. That puts upward pressure on prices.

And if the weather becomes unexpectedly cold or harsh, price spikes can intensify.

This means less natural gas would be available for storage. And this, in turn, would lead to higher prices as countries scramble to replenish their depleted natural gas reserves. It’s a vicious circle.

And I’m sure we all remember what happened in February 2021, when extreme weather conditions in Texas closed down U.S. oil refineries and plunged millions of Americans into darkness. Energy prices across the country soared as a result.

What This Means for You and Your Money

The good news is that the EU has already managed to fill 85% of its natural gas storage from alternative sources. As a result, natural gas prices there have pulled back somewhat from their recent peak.

But they still remain more than double where they were in January 2022, before Russia invaded Ukraine.

And the ongoing uncertainty means energy prices will likely stay elevated into 2023.

A good way to position yourself in the short term is with an energy-related exchange-traded fund (ETF).

The United States 12 Month Natural Gas Fund (UNL) tracks natural gas price movements.

Regards,

signature

Nomi Prins
Editor, Inside Wall Street with Nomi Prins

P.S. As I said in my essay today and yesterday, the energy crisis on the other side of the Atlantic won’t stay on the other side of the Atlantic…

As the contagion spreads from Europe to America and from the energy markets to the financial system – a portion of your retirement could be at great risk.

[Nomi Prins: 10x Gains on a Small Firm Disrupting a Critical American Industry]

Read more from Nomi Prins at PalmBeachGroup.com

Battery Stocks Supercharged by U.S. Senate Proposal?

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There’s an old quote I’ve always loved:

The harder I work, the luckier I get.

No one really knows who said it. A similar quote was attributed to Thomas Jefferson, our third president and Declaration of Independence signee.

Perhaps a more elegant version is that of the brilliant French scientist Louis Pasteur:

Fortune favors the prepared mind.

I find this sentiment holds true when investing.

At one point or another, every investor gets lucky. You buy a stock or an option, and the next day it soars for reasons you never anticipated.

It’s happened to me, and I bet it’s happened to you!

But here’s the thing. I find that when I do my research and follow my system, these lucky little surprises happen at a higher rate. Here’s my version of the quote:

The more disciplined I am, the luckier I get.

I mention this because the U.S. Senate wants to provide a major shot in the arm for alternative energy, one of my highest-conviction mega trends.

Inflation Reduction Act and the Renewable Energy Mega Trend

We’ll see just how much the proposed Inflation Reduction Act actually reduces inflation. The biggest inflation drivers these days remain the pandemic-related supply chain mess, the war in Ukraine, the labor shortage and the lingering effects of the Federal Reserve’s massive COVID-era stimulus.

This bill doesn’t really address any of that.

But it does offer provisional investment tax credits for energy storage. Energy Storage News reports the credits would reduce the cost of new energy storage projects by around 30%!

If you’ve been reading Green Zone Fortunes for any length of time, you know that I am über-bullish on renewable energy.

This isn’t political or ideological for me. It’s just basic economics.

[Nomi Prins: 10x Gains on a Small Firm Disrupting a Critical American Industry]

Renewable energy is, by its very definition, unlimited. Oil and gas wells get depleted over time. But the sun still rises in the east every morning, and the wind keeps blowing.

The cost of new solar and wind projects is now cheaper than coal or natural gas, and this was true before the war in Ukraine.

Renewable energy will become a larger and larger percentage of the energy grid. It’s inevitable.

Up until recently, the biggest hurdle to broader renewable energy acceptance was storage. The sun doesn’t shine at night, and some days are windier than others. For renewable energy to compete with oil and gas in terms of reliability, we needed a good way to store it.

And the proposed Inflation Reduction Act addresses that in a huge way.

Manchin & Co. Juiced Energy Storage Stocks

This was one of my favorite investment opportunities long before the new bill was announced, and I recommended a utility-grade battery storage firm in Green Zone Fortunes back in March. We’re up more than 34% so far, and this is despite the broader stock market sell-off.

The fun part? About half those gains came the day the Inflation Reduction Act was announced!

I’m a builder of trading systems, not a political analyst. I had no way of knowing that the Senate would propose this or that my home state representative, Senator Joe Manchin, D-W.Va., would get on board, making its passage more likely.

But I did know that we had a durable mega trend in place: the rise of renewable energy. I also knew that battery storage was a smart way to play that trend.

The odds were already stacked in our favor, and I expect that this trade would have worked out nicely for us even without the Senate’s help.

But to return to the quote:

The harder we work, the luckier we get!

Bottom line: I still see massive upside ahead for utility-grade battery storage and for green energy in general — even without the Inflation Reduction Act.

This trade is still in its early stages. If you’d like to know more about how my Green Zone Fortunes subscribers are playing it, click here to watch my “Infinite Energy” presentation.

To good profits,

glasses

Adam O’Dell

Chief Investment Strategist

[Infinite Energy Stock: The Tiny Company Dominating Tesla in the Trillion-Dollar Green Energy Race]

Read more from Adam O’Dell at MoneyandMarkets.com

Does this Energy ETF have More Gas in the Tank?

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Energy stocks are the talk of the town again after losing over 14% last week. After gaining over 70% in 2022, the Energy Select Sector SPDR Fund (NYSE: XLE) was close to the last safe spot for investors. XLE stock is still up 30% YTD, and many signs signal the run is not over yet.

At the same time, with talks of a recession picking up, is it time to give up on energy? Many energy stocks are trading back to prices before the war in Ukraine broke out. But oil futures are still up over 50% from last year. And the gas situation is even more of a challenge.

Gas futures are up over 100% from last year, and prices at the pump are right below all-time highs. Meanwhile, the Fed and Biden administration are using all the tools available to bring some relief. The Fed just raised interest rates by the largest amount since 1994.

Not only that, but President Biden tapped the strategic oil reserve, is working with OPEC to increase supply, and calling out oil companies to do their part.

Will it make a difference? XLE stock looks ripe for a bounce. Here’s what you should know before buying.

No. 4 Commodities Often Run in Multi-Year Cycles

When the commodity market rallies, it can last years before turning over. In fact, these extended rallies are called “Super Cycles.”

For example, in the 1930s, commodities rallied as the U.S. prepared for WW2. Then again, in the ’90s, as industrialization swept across the nation. And the most recent, peaking around 2012-14 as emerging markets developed.

Researchers have several reasons to explain why these cycles happen.

  1. New projects take years to complete.
  2. Supply and demand drive commodity prices.
  3. A specific event usually triggers rallies.

The most important thing to know when considering buying XLE stock is knowing that commodity prices, such as gas and oil, are driven by supply and demand. With this in mind, energy prices are rapidly rising due to higher demand and a limited supply.

For one thing, over 100 oil and gas companies went out of business during the pandemic. As travel halted, energy demand fell off a cliff. Meanwhile, energy companies had no choice but to go bankrupt.

Fast forward a year, the economy reopens again, and demand shoots through the roof. But, with less capacity, companies are struggling to keep up.

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No. 3 Energy Supply Is Still a Concern

After underinvesting for many years leading up to the pandemic, the industry was due for a shakeup. As leaders promised a new “green” future, investors poured money into renewable energy investments. As a result, the oil industry cut back on projects and was forced to abandon others.

So, supply was limited to begin with. And then Russia invading Ukraine was the final straw. NATO leaders decided to ban or restrict oil coming from Russia.

The oil ban caused a ripple effect across energy markets as oil prices briefly soared over $120 a barrel. Meanwhile, the gas situation is even more challenging as refining capacity in the U.S. nears maximum. To explain, refiners turn oil into gas and other by-products. Many companies that went out of business were either E&P (drilling) or refiners.

In fact, the latest data from the Energy Information Administration (EIA) shows refinery capacity is at 94%, the highest since the pandemic.

With this in mind, there’s only so much capacity in the U.S. to make gas. In other words, supply is limited. So, by raising interest rates, the Fed is going after demand. To slow demand, the Fed is makes borrowing more expensive.

For example, higher interest rates may mean fewer vacations or travel. As a result, less gas is being used in the economy, whether by car or plane.

No. 2 XLE Stock Was Due for a Pullback

This year, energy has been the only strong sector in a very weak market. To illustrate, XLE stock gained over 68%, hitting a 52-week high of $93.3 per share earlier this month.

But with talks of a recession and a bear market looming, XLE shares gave in like the rest of the market. Eventually, every sector or market gets sold during a bear market. And last week, the time came for energy stocks.

At the same time, XLE shares reached overbought levels according to the Relative Strength Index (RSI). Though XLE stock hit overbought on the daily, weekly, and monthly charts, quarterly sits below 60.

Meanwhile, many energy stocks are trading back to prices before the war in Ukraine started. For instance, EOG Resources (NYSE: EOG), one of the largest natural gas companies, sits at $111, the same price as when the war started.

Although this may be true, the uptrend in most oil and gas stocks is still intact. For one thing, many energy stocks are trading above their 200D SMA, a sign of momentum.

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Lastly and most importantly, the stocks fell to critical levels of support. Not only is XLE stock sitting on this year’s volume-weighted average price (VWAP), but it’s also right around a historic level of resistance.

XLE stock was due for a pullback, but will it continue to crack? Or was it just a shakeout?

No. 1 Hedge Funds Buying with Record Cash Flow

Energy has been one of the stock market’s only places to earn a return this year. Then again, oil companies are making record cash flows with high energy prices. And as a result, they are splitting the profits with investors through dividends and buybacks.

You may have even heard President Biden saying Exxon Mobile (NYSE: XOM) made “more money than god” this year. For one thing, several tech companies make more than Exxon. But he has a point. In the first quarter, Exxon generated $14.8 billion in free cash flow (FCF).

Besides that, with energy prices hitting a record high, Exxon announces a $30 billion share buyback plan through 2023. On top of this, Exxon is the largest holding in XLE stock. So, what benefits Exxon stock also benefits XLE stock. It’s no wonder investors and hedge funds are interested in the market.

According to information from Hedgefollow.com, the XLE ETF continues to see heavy institutional buying. In fact, buying activity in Q1 was the highest since Q2 2014.

XLE Stock Forecast: Do We See a Bounce in XLE Share Price?

The XLE stock selloff last week came due to a change in investor expectations. At first, investors braced for high inflation and low growth, also known as Stagflation.

But with the Fed raising interest rates, a new concern is developing. What if the Fed raises interest rates too quickly, sparking a recession? If this is the case, demand could fall drastically.

At the same time, until proven otherwise, the story remains the same. Energy is essential for the economy to function. With near-record energy prices, companies are generating massive amounts of free cash flow.

And consumers are still paying for it. According to new research from Yardeni Research, families in the U.S. are paying $5,000 a year on gas, up 78% from last year.

Is this the start of a new multi-year cycle? The big question will come down to how effectively the Fed will bring demand down.

As for XLE stock, I believe the ETF has more gas in the tank this year. With summer demand revving up, I wouldn’t be surprised to see the rally continue. And then, into hurricane season, we could also see a boost. That said, a recession could take the market lower.

In the long run, the direction many nations are heading is clear. To meet their climate goals, many leaders are investing in renewable energy. Although XLE stock holds some clean energy businesses, it mainly invests in oil and gas. If you wish to get ahead of the clean energy movement, check out these top renewable energy stocks for long-term growth.

[Shocking: Tesla's Worst Nightmare? (Coming True Right Now)]

Read more from Pete Johnson at InvestmentU.com

Is Decentralized Manufacturing the Key to our Clean Energy Future?

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Dear Reader,

On Monday, we had a look at some of the latest government shenanigans with respect to soaring gasoline prices. I also shared my predictions for even more “stimulus” in the form of gas tax relief to partially offset the spike in gasoline prices primarily caused by inflation.

While the government may continue to try to blame rising oil and gasoline prices on Russia, the prices had already been soaring prior to the war breaking out.

Inflation is a monetary policy phenomenon. It’s the result of grossly irresponsible money printing, and it hurts everyone, especially those in lower income brackets. The Russia/Ukraine crisis simply added some more short-term volatility.

The reality is that, on a global level, Russia provides a relatively small percentage of the world’s oil exports – only 8%. The conflict has resulted in about 3 million barrels of oil a day being removed from the global markets.

It’s not that much, but it does create a short-term supply shock because it happened so suddenly. Countries that were importing Russia’s oil have to look to other oil-producing countries to increase production in order to cover the shortfall.

The impact of the shortfall is obviously felt the most by countries that are heavily dependent upon Russia’s oil (and natural gas). It’s even worse for countries that don’t have the ability to increase any domestic production.

But something interesting has been happening…

While the sanctions by NATO countries have banned the purchase of Russian oil for refinement, there is a loophole.

Trading companies have been purchasing the Russian oil and storing the oil in Europe (of all places) for future refinement. This is possible because purchasing oil for the purpose of storage isn’t prohibited by the sanctions.

In this regard, the supply shock isn’t as bad as it has been made out to be. But there is a far more serious dynamic at play that very few are talking about…

Since the outbreak of conflict, Russia’s oil exports have declined dramatically. Russia as a country is energy-independent. It has far more oil and natural gas than it needs.

But there is a larger problem that concerns the rest of the world. It doesn’t have anywhere to store its production.

The sanctions have resulted in excess production in Russia. The trading companies in Europe can only buy and store so much oil for future refinement. That means that Russia’s storage facilities and pipelines are at full capacity. I don’t think it will be long before wells shut down because there is no place to put the oil.

Some might think, “Great! Serves them right!” But there are other implications…

Once these wells shut down, or freeze, new wells must be drilled. It could take years, or even a decade, before Russia’s production returns to 2021 levels.

And that means much higher prices for oil in many parts of the world for an extended period of time. I believe that Europe will eventually see $200 a barrel.

Only countries that have the capacity for domestic production will be able to keep oil below $100 a barrel. Prices in the $120–150 range will be considered normal.

The U.S., however, is fortunate to have strong domestic production capabilities. And as I predicted on Monday, I believe that the current administration will have to ramp up domestic production and likely ban oil exports in the interest of keeping oil, and thus gasoline prices, down.

It will be entirely political, but it will happen nonetheless. This will, of course, come at the expense of other countries who would like to purchase excess production.

It has never been more obvious that we need energy-producing technology that will meet the world’s energy requirements in a fully decentralized manner, where no one country can have such an outsized – and negative – impact on the global economy.

The three most critical and fundamental needs of the human race are food, potable water, and energy. Yes, love and friendship count, too. But without food, water, and energy, there wouldn’t be a human race.

Limitless, abundant, and clean energy across the planet can bring abundance in both food and water (think desalinization). Imagine a world in which there would be no need for any geopolitical conflict caused by the need for energy. Sources of energy have been the driver of war for centuries.

The answer is, of course, the power of the Sun – the nuclear reactions that literally sustain life on Earth by making the planet habitable. It’s time for the world to step up and make nuclear fusion a reality.

Carbon-free, emission-free, abundant, and limitless power… Some forms of which don’t produce any nuclear waste at all.

If we don’t solve the problem for clean, utility-scale, baseload energy production, we’re going to be suffering decades more of geopolitically-driven pain and suffering largely caused by the puppet masters toying with our own life and liberty.

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The all-seeing orb is cashing up…

We talked about Worldcoin and its all-seeing orb back in November. This creepy project is moving forward faster than expected…

For the sake of new readers, Worldcoin envisions creating a global monetary system.

Worldcoin’s plan is to scan everyone’s retina to create a unique biometric identity. That identity then becomes a digital wallet for the project’s cryptocurrency, Worldcoin (WDC).

The device that scans retinas is “the Orb.” It’s a silver orb that looks like the palantir “seeing stones” in The Lord of the Rings movie series.

Worldcoin is aggressively pushing the Orb on consumers. The project’s goal is nothing short of capturing every eyeball on the planet. And Worldcoin is giving away “free” WDC to everyone who scans their retina as an incentive.

“Orb operators” are also incentivized to sign people up by awarding the operators WDC for their services. Worldcoin reports that the “best” orb operators can sign up about 1,000 people a week with a single orb.

Well, Worldcoin just raised $100 million in a WDC token sale… at a $3 billion valuation. That’s steep given the project is still in its early stages.

Among the institutions that purchased WDC tokens were crypto-focused powerhouse venture capital (VC) firm Andreessen Horowitz, Coinbase Ventures, and Digital Currency Group (DCG). In addition, LinkedIn founder Reid Hoffman personally invested in Worldcoin’s token sale.

This is a powerhouse of backers. I’m a bit surprised to see them investing in Worldcoin at a $3 billion valuation… especially considering the privacy issues around taking biometric data from people.

Of course, Worldcoin’s mission sounds very altruistic. It’s all about global financial inclusion. And its website is even set up as a ‘.org’.

But to me, this is the same pitch we got from Facebook (now Meta). And we know how poorly Facebook has treated its users’ data.

So I’m very skeptical. And I don’t believe for a moment that our biometric information will be kept “safe.” I absolutely recommend readers stay as far away from Worldcoin’s Orb as possible… Please don’t look “deep into its eye.”

Still, we will need to keep a close eye on this project going forward. Worldcoin’s cryptocurrency, WDC, might just be a good speculation at some stage.

And with $100 million in new funding and powerhouse backers, Worldcoin is setting itself up to gain some serious momentum…

[New Energy Tech: The Forever Battery – Ushering in a New Era of Energy Storage]

More evidence that decentralized manufacturing is the future…

Tesla just opened its first European factory in Germany last week.

This is a remarkable development given all the chaos unfolding in Europe right now. And it clearly demonstrates the major shift in manufacturing we have been tracking in The Bleeding Edge…

As we know, people hold the German auto industry in high regard. German-made cars are typically associated with high quality and attention to detail.

However, Germany is also known for high labor costs. Labor unions are very strong in the country. The average workweek for German auto workers is just 35 hours per week. I can’t imagine what that would feel like… A light week for me is 70 hours.

The high costs and relatively low hours make it expensive to manufacture in Germany. Yet Tesla plans to produce half a million vehicles every year in this new factory.

In other words, Tesla’s automation technology has made it economical to produce cars in high-cost markets for the first time in decades.

And this allows Tesla to manufacture much closer to its target markets. This is the decentralized manufacturing trend that has been gaining steam over the last several years.

For the last several decades, nearly all manufacturing has been centralized in China and Southeast Asia. Then companies would ship the finished goods to consumers in the U.S. and Europe. This makes for complex supply chains that, as we discovered, are subject to major disruption.

Tesla is breaking that cycle. We are witnessing a dramatic shift towards decentralized manufacturing and something called reshoring.

And it’s all thanks to automation. Robotics and artificial intelligence (AI) can now boost productivity and make manufacturing economical in the West again.

This is a trend that will accelerate for the rest of this decade.

And we’ll continue to find ways to profit as the trend continues.

[Exclusive: Tim Bohen – Last Call Before Elon’s “Project X” SHOCKS the World (Again)]

NVIDIA’s $1 trillion opportunity…

NVIDIA just held its annual GPU Technology Conference (GTC).

To me, this is one of the most important conferences of the year. I always drop in to listen to CEO Jensen Huang’s presentations.

And Huang’s presentation this year was certainly special. He announced NVIDIA’s new AI semiconductor architecture. It’s called the Hopper chip family – named after computer scientist Grace Hopper.

The Hopper chips are designed to replace NVIDIA’s Ampere chips. And get this – the first Hopper-based chip, H100, provides nine times the performance of its predecessor. This is a revolutionary step forward.

The new chip uses 4 nanometer (nm) processing technology. And it consists of 80 billion transistors. That’s 68% more than the Ampere chips.

So the Hopper chips represent almost a magnitude jump in performance. And that opens the door to a massive market opportunity.

With this new product, Huang said the company is targeting industries with $100 trillion in revenue. And he believes NVIDIA can capture 1% of that.

In other words, NVIDIA has a $1 trillion-a-year opportunity.

Here’s the breakdown of where NVIDIA thinks this $1 trillion in revenue will come from:

  • $300 billion – Automotive industry
  • $300 billion – Data center applications
  • $150 billion – AI for enterprise software
  • $150 billion – AI software for the Omniverse (NVIDIA’s word for metaverses)
  • $100 billion – Gaming industry

Incredible.

And what stands out to me most is how far NVIDIA has come since I first recommended the company in February of 2016. That was at a small conference focused on high-net-worth investors and family offices.

At the time, NVIDIA was considered to be just a video game tech company. Its graphics processing units (GPUs) were primarily used almost exclusively for gaming.

But I knew that NVIDIA’s GPUs would ultimately enable AI and machine learning applications at scale, as well as power autonomous vehicles. That was my pitch in 2016. NVDA was trading around $24 per share at the time.

Fast forward to today, and my predictions all came true. NVDA trades around $283 a share. Anyone who bought on my original recommendation in 2016 is now up 4,290%.

And subscribers to The Near Future Report are up 721% on my official recommendation in that publication. (If you’d like to learn more about joining us, go right here for more information.)

This is such an incredible success story. NVIDIA is a textbook example of what’s possible when bleeding-edge technology is applied to explosive growth markets.

What’s more, NVIDIA’s new chip architecture will lead to incredible breakthroughs in the field of AI and machine learning in 2023 when Hopper becomes widely available. I can’t wait to see what comes from this.

Regards,

Jeff Brown
Editor, The Bleeding Edge

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Read more from Jeff Brown at BrownstoneResearch.com

This Metal Is Vital for a Secure Energy Future

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At 7.9%, today’s inflation is unlike anything we have experienced in decades.

Many factors contribute to the overall inflation rate. But energy prices are the main driver of inflation today.

Energy prices spiked 29.3% last year. This included a nearly 50% increase for gasoline. The world was reopening after the pandemic. This drove global demand and caused prices to rise.

So, even before Russia invaded Ukraine last month, Americans already felt the pinch at the gas pump.

Now, energy prices have skyrocketed even more. The conflict thousands of miles away caused the price of oil to jump to its highest levels in years… recent pullback notwithstanding.

I know, this sounds grim. And it’s no fun at the gas pump at all.

But there’s another side effect of rising energy costs… And it’s creating an opportunity in one of my key investment themes.

To remind you, my key investment themes are New Energy, Infrastructure, Transformative Technology, Meta-Reality, and New Money.

It’s in the first one, New Energy, that I see the opportunity I’m writing to you about today…

Events unfolding on the opposite side of the world are acting as a catalyst in the New Energy sector.

Today, I’ll take you through the specifics… and show you how you can position yourself now for future gains…

Russia’s Grip on Europe

Russia’s dominance over global energy markets has expanded significantly under Vladimir Putin.

The European Union imports nearly half its natural gas from Russia. This gas fuels Europe’s economy and heats its homes.

And that dependency has grown in recent years. In 2021, 45% of total E.U. gas imports came from Russia. That was up from 26% in 2010.

The three largest economies in the E.U. import huge amounts of their gas supplies from Russia:

  • Germany: 55%
  • Italy: 45%
  • France: 17%

Russia also accounts for 10% of the world’s oil supply. It exports almost 5 million barrels of crude oil and 2.8 million barrels of refined products every day.

Most of that goes to countries in Europe.

Finland and Hungary get almost all their oil from Russia. Poland gets more than 55%. Germany and the Netherlands get upward of 40%.

Europe is dangerously addicted to Russia’s energy.

Putin knows this. Recently, he threatened to shut off Russia’s pipelines.

Now, I believe it’s unlikely he will follow through on this threat. After all, his country relies heavily on the income from its energy exports. From his perspective, with a war to finance, he can’t afford to shut off that income stream.

But European countries are (finally) realizing that they cannot rely on a supplier who explicitly threatens them.

And they’re taking action to reduce their dependence on Russian oil and gas…

[Exclusive: Tim Bohen – Last Call Before Elon’s “Project X” SHOCKS the World (Again)]

Dashing into New Energy at Lightning Speed

The European Union plans to cut its reliance on Russian gas by two-thirds this year.

And here in the U.S., President Biden announced an immediate ban on all Russian oil imports.

Here’s the bottom line… Global powers are determined to reduce their dependence on Russian energy.

So, they need to find alternative sources of energy… fast.

And that’s where the opportunity for us lies.

Earlier this month, the European Union outlined a plan to become independent from all Russian fossil fuels “well before 2030.” It plans to triple its renewable energy capacity by 2030.

Frans Timmermans, the European Commission vice-president responsible for the European Green Deal, promised to “dash into renewable energy at lightning speed.”

Germany is moving swiftly towards alternative energy sources.

Previously, it aimed to shift to 100% renewable power supply by 2050. And it is phasing out its nuclear power plants. The last three reactors are set to go offline later this year.

But just days after Russia invaded Ukraine, the E.U.’s top economy ramped up its timeline. It now aims to generate all the country’s electricity from renewable sources by 2035. That includes wind and solar.

And it has allocated an extra 200 billion euros to expedite the new agenda.

Energy Security Is Just As Important to the U.S.

What about the U.S.?

Thankfully, our nation is far less dependent on Russian oil than Europe. In 2021, about 8% of U.S. oil imports came from Russia.

Now, that’s not insignificant. But it meant the U.S. was in a much stronger position than Europe to announce a complete ban on its energy imports from Russia.

But oil is traded in a global market. So, if oil prices go up further because of what is happening in Europe, Americans will feel the pinch at the pump even more than they do today.

In other words, energy security is just as important for the U.S. as it is for Europe.

And one way to guarantee our energy supply is to develop domestic sources of renewable energy.

The Bipartisan Infrastructure Law President Biden signed in November 2021 earmarks $100 billion for clean energy projects.

The Russian invasion of Ukraine is an added impetus to the rollout of any projects that will help the U.S. secure its energy supply into the future.

This Metal Is Vital for a Secure Energy Future

A lot of that money will flow into the raw materials we need to build a cleaner and more secure energy future.

Commodities will play a massive role in the New Energy revolution we’ve been telling you about. Copper will take center stage.

The world will need a whole lot of copper to make the transition to a greener economy a reality.

The global wind power buildout is a case in point.

Right now, offshore wind is responsible for less than 0.5% of global electricity capacity. But the number of annual offshore wind installations is expected to grow 13-fold by 2030. This will generate demand for up to 7 million tonnes of copper.

Meanwhile, many other renewable energy systems use as much as 12 times more copper than traditional fossil fuel-powered systems. These include solar, hydro, thermal, and air source heat pumps.

The global electric vehicle (EV) race is another essential piece in copper’s story.

Currently, 10% of new vehicles sold in the world’s major markets are electric. Bloomberg estimates that by 2030, that figure will rise to about 50%.

Copper is used extensively in EV batteries, wiring, and charging stations. In fact, each EV uses up to 83 kilograms of copper. That’s more than three times the 23 kilograms used in an internal-combustion-engine vehicle.

And copper is a vital component of the wiring used in charging stations.

[Don't Miss: Louis Navellier – The #1 Electric Vehicle (EV) Battery Stock of 2022]

A Simple Way to Profit

The global transition to cleaner energy and EVs will play a vital role in future copper demand growth.

And what’s happening in Ukraine right now has lit a fire under governments worldwide. They are determined to do whatever it takes to speed up these trends and reduce their reliance on Russian energy.

It’s the perfect set up for higher copper prices.

A great way to position yourself in copper is with the United States Copper Index Fund ETF (CPER). The fund closely tracks the price of copper, offering convenient exposure.

Happy investing, and I’ll be in touch again soon.

Regards,

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Nomi Prins

Editor, Inside Wall Street with Nomi Prins

Read more from Nomi Prins at RogueEconomics.com