Today's apparent exceptions are in sectors very focused on energy security and transition, as we noted in our most recent Sunday Thematic, and agriculture, where crop shortages are driving up prices and demand for yield-enhancing inputs. In the OCI results below, we see a company doing well, despite having impacted assets in Europe. Still, we also see some potential upside in methanol as we head into the European winter, with the possibility that methanol is used as a fuel, essentially as a carrier for methane, and a workaround for constrained LNG infrastructure. As a fuel, it is not directly substituted for methane in any application, as it is a liquid, but some energy users might be able to adapt, and a $30 per MMBTU natural gas price in Europe can cause you to be quite creative. Of course, the methanol export opportunity for the US will depend on the US natural gas price remaining well below the price in Europe. For more see today's daily report.
Source: OCI – 1Q22 Earnings Result Presentation, May 2022