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Crisis Investing: Gazprom (OGZPY) is upping the ante

Today's Financial News - Posted January 4, 2009

Gazprom (OTC:OGZPY) is doing whatever it can to not settle with Ukraine. More action is ahead!

by J. Christoph Amberger

Baltimore — (TFN): What do you do if you’re embroiled in a dispute with a customer who can’t pay the price you’re asking—but holds the easement rights to the driveway leading to your property?

You do anything you can possibly do to avoid a simple solution. Like, raise your prices.

Gazprom (OTC:OGZBY), the Kremlin’s monopolist foreign-policy muscle, has no interest at all settling what they’re billing as a price dispute over natural gas with Ukraine. The name of the game is building up just enough pressure in the countries that depend on smooth delivery of Russian transit gas that any action Russia choses to takes can be justified as “customer service”.

If the side effect of that action is either regime change in Ukraine—toward a more pro-Russian, anti-West government—or control of the gas pipeline that cements Gazprom’s monopolist position as most important supplier of energy to the soft, flabby democracies of Western Europe… well, that would be a nice fringe benefit. And they take what they can get.

Accordingly, Gazprom once again raised its asking price for natural gas delivered to Ukraine. And not by increments, either: The asking price went up from $250 per 1,000 cubic meters… to $418 for the same volume.

And external pressure on Ukraine is building, too, as the pressure is dropping in the pipelines that pump natural gas across Eastern Europe to Hungary, Romania, Poland and Bulgaria… who reported shortages of up to 30 percent over the weekend.

Another week at dropping temperatures, and the Europeans themselves may be urging Putin to dust off the old Kalashnikov.

With the Bush Administration wrapping the china in old copies of the Washington Post and Obama getting ready to give speeches, we’re less than 3 weeks away from a serious international incident.

How to profit from this situation? I say get ready to short Gazprom. And then there are three energy companies that will most definitely be cashing in on the delayed gratification of Europe’s energy appetite.

Maybe you’d like to refresh your memory just what these companies do? Here’s the link to our comprehensive early warning! In it, you will also learn how members of our premium services got our detailed breakdown on how to take action.


Next Article: Pfizer shouts its message to the world

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Posted by J. Christoph Amberger · Filed Under Oil and Energy 

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