European gas prices to halve this winter: Goldman Sachs


Investment firm Goldman Sachs expects gas prices to plummet in Europe this winter, citing European Union countries trying to avoid shortages as Russia cuts gas.

new Note to clientsGoldman Sachs analysts say European gas prices could halve within the next six months as the EU struggles to stave off shortages ahead of an expected colder-than-normal winter. said.

Analysts expect European wholesale natural gas prices to be around €215 ($214) to €100 per megawatt hour (MWh) by the end of the first quarter of next year if winter conditions remain relatively normal. We expect it to fall below the euro ($99). .

A more positive outlook came despite Russian energy giant Gazprom’s announcement to extend the closure of its Nord Stream 1 (NS1) pipeline.

A Goldman Sachs analyst said: I hear a lot of questions about how this will affect storage, but a better approach would be to ask how this would affect pricing so that storage continues to build on demand. I think. ”

“This is a puzzle that Europe has successfully solved over the past year due to a combination of disrupted gas demand within and across Europe. [liquified natural gas] Buyers elsewhere in the world are piling up above average inventory. ”

Analysts added that they expect storage facilities to be on average 90% full by the end of next month. The EU authorities Target Minimum 80% storage level by November 1st.

‘Market Salvation’ on the Horizon

according to the latest data Overall storage levels in the EU are just over 84%, according to data compiled by industry group Gas Infrastructure Europe.

Goldman said it expects its storage facilities to be more than 20% full by the end of March next year.

“This will set the stage for the current sense of urgency to disrupt demand to gradually give way to market relief that we have weathered the winter,” analysts wrote.

EU countries are separating themselves from Russian gas after invading Ukraine earlier this year. But demand remains high, prices skyrocket, and an unprecedented energy crisis is feared this winter.

Along with ramping up supply in recent months, the European Union is set to announce a series of measures aimed at lowering prices on September 14th.

They include proposals for goals countries should achieve to reduce demand for electricity and for non-gas generators to share this year’s surplus profits to help struggling consumers. . report.

On Sept. 11, US Treasury Secretary Janet Yellen said during her State of the Union address on Sunday on CNN that the EU will move to slash purchases of Russian oil this winter. Consumers warned they could face a sharp rise in gas prices. Note that officials want to ban the shipment of Russian oil tankers to Europe.

Katavera Roberts

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Katabella Roberts is a news writer for The Epoch Times, focusing primarily on US, world and business news.