LNG Stocks Are Depleted And Will Need To Be Replaced From February Onwards

Liquidity issues still in the background

The volatility of commodity prices, namely natural gas and power requires European utilities to have extra liquidity available to meet margin call requirements. The needed additional cash collaterals have created a difficult environment where most utilitie need to extend and increase credit lines or loans all at the same time.

With banks having limited room to increase their available capital, finding liquidity on the market has become a challenge. While natural gas prices appear to be coming down from th eir highs, volatility might be difficult to keep under control, especially once stored LNG stocks are depleted and will need to be replaced from February onwards. We would expect the EU proposal for a new TTF gas wholesale market mechanism gover nments’ liquidity support plans to increase stability.

As of today, as well as Germany has earmarked a budget of €68bn available to utilities needing extra liquidity to meet margin call requirements. The United Kingdom is willing to dedicate €46bn and Sweden €23bn. liquidity needs at €10bn. Finland and France have thus far both evaluated

EU proposals to tackle the energy crisis should not be disruptive

From September 2022 onwards, the European Commission has worked on different actions that could be adopted to mitig ate the impact of high energy prices

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