• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 8 days Does Toyota Know Something That We Don’t?
  • 2 days America should go after China but it should be done in a wise way.
  • 8 days World could get rid of Putin and Russia but nobody is bold enough
  • 10 days China is using Chinese Names of Cities on their Border with Russia.
  • 11 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 11 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 10 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 16 hours Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 2 days How Far Have We Really Gotten With Alternative Energy
  • 11 days Putin and Xi Bet on the Global South
  • 11 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
ExxonMobil's Record Profits Defy Political Expectations

ExxonMobil's Record Profits Defy Political Expectations

ExxonMobil has achieved its highest…

European Utilities Rally As EU Unveils Rescue Plan

Just hours after the European Commission proposed caps on power prices across the bloc, European utilities have rallied, with stocks gaining on indications that a price cap plan will include ways to increase liquidity for energy companies facing over a trillion dollars in margin calls. 

More than anything, European utility stocks seem to be rallying on more clarity about what is to come, with RBC Capital Markets’ Fernando Garcia telling Bloomberg that the price cap proposal “might remove uncertainty for the sector and make it sustainable for consumers again.” 

Beyond a reduction in electricity uses, the plan is broad and includes a price cap on Russian gas imports, a tax on fossil-fuel producers and measures to increase energy company liquidity.

At 11:30 a.m. EST the Stoxx Europe 600 Utilities index was up 2.31% on the day, with Germany’s RWE utility up nearly 9% and Madrid-based EDP Renovaveis SA up nearly 3%. Energias de Portugal SA was up over 4% at the same time. 

While European utilities have been selling power at record-high prices, lack of cash is choking them, with Finland recently warning that the sector could meet a “Lehman Brothers” fate if government’s fail to step in with help. 

The liquidity problems stem from a setup in which power generators rely on futures markets to guarantee prices, de-risking power sales to customers through short positions in futures markets. This protects them from sudden drops in prices, or allows them to cover shorts if prices are higher, as explained by the Financial Times.

That has worked fine until now, in the midst of an intensifying energy crisis in which collateral requirements for hedging power sales have skyrocketed and energy companies face $1.5 trillion in margin calls. 

EU energy ministers are set to discuss the plan at an emergency meeting on Friday.

By Charles Kennedy for Oilprice.com 


More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • George Doolittle on September 07 2022 said:
    Long $nee Next Era Energy
    Strong buy

    $plug Plug Power might become a ten bagger at this incredibly high price for natural gas plus now soaring interest rates.

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News