European Utilities: Low European gas storage underpins positive earnings momentum for generators and integrated utilities

Research evidence excerpt

European Utilities: Low European gas storage underpins positive earnings momentum for generators and integrated utilities

pply has caused mukund.verma@jpmorgan.com

J.P. Morgan Securities plc

storage injections to lag behind recent years, with summer/winter spreads in

backwardation providing minimal market incentive to ramp-up injections. The Specialist Sales contact details:

withdrawal season begins in Q4, putting pressure on European operators to

Ian Mitchell - Specialist Sales -

find a solution in Q3 or risk higher and more volatile prices over the higher European Energy

demand winter. To put it simply, if summer TTF prices continue to be low (44-20) 7134-1356

then winter TTF prices should be higher. ian.e.mitchell@jpmorgan.com

• Germany, Italy and the UK Face Bigger Challenges: All are heavily reliant JPM Top Picks for a High Gas Price

on gas for residential, commercial and power generation uses and, with gas and Environment in H2-26

power prices highly correlated, would most materially absorb the effect of Rating PT Upside

higher winter gas prices, leading to a power price uplift. RWE OW (AFL) €65 +12%

• Expect Higher and More Volatile Power Prices, Even With a Ceasefire: We Centrica OW 235p +36%

expect a moderate ramp-up in Qatar LNG volumes and a slower pace of other Engie OW €32.0 +19%

incremental LNG supply to keep gas market conditions tight into winter, in line Naturgy OW €30.5 +6%

with the view of our Commodities Research Team. Heatwaves, especially in

Source: J.P. Morgan estimates, Bloomberg Finance L.P.

Asia, from a “Super” El Niño could increase Asian demand for LNG in Priced at cob 20-Jul-26. *Potential upside

summer, leaving unfavourable market conditions for injection in storage.

Reliance on spot LNG cargoes amidst higher global LNG demand should push