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Image source: Shutterstock - Ron Dale, panpote

What's going on?

Gazprom reported better-than-expected results on Monday, as Europe lined up all day and all night to get its hands on the natural gas producer’s exclusive product.

What does this mean?

Russia’s Gazprom was already basking in rising natural gas prices last quarter, as Europe – the company’s biggest export market – continued to wrestle with the ongoing shortage. But there’s more to the story here: the Russian government also effectively limited how much gas Gazprom could sell to Europe, in hopes the company would replenish the country’s own stockpiles. Europe and Asia, then, were left to battle it out for an increasingly scarce supply, which pushed prices even higher. And that helped drive Gazprom’s revenue up by a better-than-expected 70% last quarter compared to the same time last year.

Why should I care?

The bigger picture: Gazprom has lots more in the pipeline.
Gazprom’s expecting even better things this quarter, with demand for gas used to heat homes only set to rise as winter rolls in. The company has a good feeling about the underwater pipeline it’s been trying to build too: Europe is concerned about its historically low stockpiles of natural gas, which means it might be more likely to give the setup – which would double the undersea amount Gazprom can deliver into the region – the green light.

Zooming out: The emerging market frontrunner?
Russia’s loving this energy boom: the country’s economy – which is closely tied to oil and natural gas – is on track to grow 4.7% this year compared to last, in what would be the biggest jump in 13 years. What’s more, forecasts for Russian companies’ profits in the next 12 months are 15% higher than they were in July, according to Bloomberg. That’s more than the companies in other emerging markets like Asia and Latin America, and could suggest its stock market is a better play than theirs too…

Originally posted as part of the Finimize daily email.

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