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.
There are lots of discussions around the durability of higher energy prices and energy inflation is a central topic on some earnings conference calls and in many of our discussions with clients, especially those at chemical companies with the unfortunate task of having to prepare a 2022 budget, which of course includes a forecast of costs. We see continuing strain on the US and global natural gas system and, behind what will inevitably be some seasonal weather-related price volatility, a stronger market that could endure for years. The rate of addition of renewable power does not seem to be able to keep up with demand growth and replacement needs caused by some fossil fuel-based power plant closures around the World. Natural gas (LNG) is the natural plug-in replacement, and we continue to see underinvestment, relative to natural gas prices, as a consequence of ESG related pressure around capital spending. We would advise all clients to look at a 2022 scenario with natural gas, and oil higher than current levels.