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Goldman Sachs: Natural gas prices may exceed 100 euros/MWh in December, risking new energy crisis in Europe
🇬🇷 Greece /Energy & Infrastructure

Goldman Sachs: Natural gas prices may exceed 100 euros/MWh in December, risking new energy crisis in Europe

From Ta Nea · () Greek

Translated from Greek, summarized and contextualized by DistantNews.

At a glance

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  • European natural gas prices could exceed 100 euros per megawatt-hour in December, according to Goldman Sachs, risking a new energy crisis.
  • Europe's efforts to replenish winter gas reserves are struggling to attract sufficient liquefied natural gas (LNG) from Asia due to Middle East supply disruptions.
  • The conflict in the Middle East has tightened global energy flows, increasing competition for limited LNG cargoes and complicating supply for European buyers.

European natural gas prices may surge past 100 euros ($117) per megawatt-hour in December, as the continent grapples with replenishing its winter reserves, according to an analysis by Goldman Sachs Group Inc. The recent rally in Dutch front-month futures, the European benchmark for gas, may not be enough to draw necessary liquefied natural gas (LNG) volumes from Asia if supply disruptions in the Middle East persist into next year.

Analysts Samantha Dart and Laura Cyr noted that futures climbed to a five-month high last week, surpassing 65 euros/MWh. The conflict between the U.S. and Iran has restricted shipments through the Strait of Hormuz, intensifying competition with Asia for limited LNG cargoes and hindering supply for European buyers. Typically, gas reserve replenishment occurs in the summer, but this year's process has been delayed. Current data suggests Northwest Europe's storage fill rate is expected to be 51% by month's end, 3.4 percentage points below Goldman Sachs' base case scenario.

The conflict in the Middle East has severely constrained global energy flows, placing pressure on Europe to bolster its reserves ahead of winter. Without a clear resolution in sight, U.S. President Donald Trump announced plans for what he termed an "economic D-Day" against Iran. Analysts suggest that if Middle Eastern energy exports only gradually normalize by 2027, the December 2026 TTF contract would likely need to move above 100 euros/MWh. This price level is 110% higher than Goldman Sachs' base case of 50 euros/MWh.

A potential mitigating factor for Europe could come from weather forecasts. While Goldman Sachs' latest projection assumes average winter temperatures, a Rystad Energy AS report this month indicates that if a "super" El Niño adds at least 2 degrees Celsius to the historical average, natural gas demand could decrease, potentially offsetting low reserves.

In a scenario where Middle Eastern energy exports only gradually normalize by 2027, we estimate that the December 2026 TTF contract would likely need to move above 100 euros/MWh.

— AnalystsProjecting future gas prices under specific conditions.
DistantNews Editorial

Originally published by Ta Nea in Greek. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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