Gas prices appear too low

European natural gas prices are back to levels last seen before the war in Ukraine. This is partly due to the relatively mild winter we have seen. More importantly, Europe has made attempts to reduce its energy dependence towards Russia by shifting to LNG and other alternatives and boosting its transport and storage infrastructure. The US has now replaced Russia as the EU’s largest supplier. Russia wants higher gas prices to help financing its war efforts as 1/3 of its spending goes towards its military. We do not see why gas prices would stay as low as they are now. One way investors can position themselves for a reversal is through Equinor. The company has lost one third of its value since Summer 2022. It currently carries a 9.2% dividend yield and trades at 7.5 times forward earnings.