European gas: LNG inflows key for prices – Commerzbank

Commerzbank’s Norman Liebke argues that European gas storage will depend on higher LNG imports over winter, as current inflows of 8 bcm per month would see storages trend toward 0% by March. He considers 10 bcm realistic, but warns that delayed import recovery, strong Asian demand and missing Qatari LNG raise upside risks for European gas and electricity prices.

Import scenarios and power price risk

"If this level were maintained through spring, gas storage levels would reach just around 70% in October and head toward 0% by March."

"A middle ground would be 10 bcm, which would leave gas storage levels at about 16% shortly before the start of the replenishment phase."

"We consider 10 bcm to be quite realistic, while 12 bcm seems somewhat too high, as demand for US LNG from Asian countries is likely to remain high even if the Strait of Hormuz remains open on a sustained basis."

"This increases the pressure to import even more in the coming months, thereby raising the price risk."

"Ultimately, this would also further increase upward pressure on European electricity prices."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)