LNG Imports Key Driver of Gas Prices, Commerzbank Warns

Commerzbank's Norman Liebke warns that European gas storage levels are under threat due to insufficient liquefied natural gas (LNG) imports. At present, LNG inflows stand at 8 billion cubic meters per month, which would lead to a pronounced drawdown in storage levels by March. This scenario implies a substantial risk of storage exhaustion by the end of the winter period.

Liebke highlights that higher import volumes are necessary to avoid severe depletion of stocks. He outlines potential outcomes for European gas storage under varying monthly LNG inflow assumptions, emphasizing the system's sensitivity to changes in import levels. The analyst considers a middle-ground scenario of 10 billion cubic meters per month as quite realistic, which would leave gas storage levels at around 16% shortly before the replenishment phase begins.

The analysis emphasizes the impact of constrained LNG availability on price dynamics, with Liebke warning that a delayed recovery in imports, robust LNG demand from Asia, and missing Qatari LNG volumes contribute to upside risks for European gas markets. This increases pressure to import more in coming months, raising the risk of higher prices.

Ultimately, this would also further increase upward pressure on European electricity prices, according to Liebke. He notes that a sustained high demand from Asian countries is likely to remain, even if the Strait of Hormuz remains open.