Goldman Sachs expects "natural gas prices" in Europe to fall 30% in the first quarter of 2566.

CNBC news agency reported on November 2, 2565 that Goldman Sachs forecasts that natural gas prices in Europe will drop approximately 30% in the next few months. Because different countries will have a temporary advantage in terms of production capacity

The Dutch Title Transfer Facility (TTF) is the main European benchmark for natural gas prices. It traded around 120 euros per megawatt hour on Tuesday, but Goldman Sachs expects the benchmark to drop to 85 euros per megawatt hour in the first quarter of 2566.

The main change came in August 2565, at which time Russia invaded Ukraine without reason. It has increased pressure on Europe's energy mix. As a result, prices shot up to historical figures, above 340 euros per megawatt hour.

The recent cooler gas prices are due to a number of factors: Europe's gas storage is generally full for this winter. Temperatures this fall were milder than expected. Therefore causing the start of heavy use to be delayed. and there is an oversupply of liquefied natural gas (LNG) in the market.

Latest reports indicate that there are approximately 60 ships. Ships waiting to offload LNG cargo in Europe Some of these shipments were purchased over the summer and are only now arriving because storage is full. In fact, recent data compiled by industry group Gas Infrastructure Europe shows. that the storage level in Europe is 94%

This is despite optimism about lower gas prices in the near term. This may alleviate some of the cost of living crisis. But there is a lot of pressure on European leaders to secure raw materials in the medium term.

“Our commodities team forecasts a further decline to €85 in the first quarter before a sharp recovery next summer. as storage levels are re-established,” Goldman Sachs analysts said in a research note. Their forecast points to a price jump to below 250 euros per megawatt hour by the end of July.

Natural gas prices are expected to improve after the first three months of 2566 due to several factors.

Fatih Birol, executive director of the International Energy Agency, told CNBC's Julianna Tatelbaum on Friday that a small amount of new LNG will enter the market next year. “If the Chinese economy recovers, China's LNG imports next year may increase along with Europe's,” he said.

China was the world's largest importer of LNG in 2564, according to the U.S. Energy Information Administration. However, due to strict COVID-19 policies, the Chinese economy has had to deal with mass lockdowns that have dampened growth. Any change in this political alignment will increase demand for LNG and also drive up prices for European buyers.

Gas storage is also aided by Russian supplies. which the European Union is trying to stop using itself Even Xavier Bettel, Prime Minister of Luxembourg which is a country in the European Union It also admitted in October that its storage facilities were full of Russian gas. Russian supplies have been severely disrupted and it is Europe's goal to be completely free of Russian fossil fuels.

CEO of EDP, a Portuguese utility company. Concluding when speaking to CNBC's "Squawk Box Europe" on Friday, Miguel Stilwell d'Andrade said, "We're certainly in a much better place than we were a few months ago," but "we should expect there to be some very volatile in the future.”

refer : https://www.cnbc.com/2022/11/02/goldman-sachs-expects-european-gas-prices-to-tumble-30percent.html