European Natural Gas Prices May Need to Top €100 to Meet Winter Demand
European natural gas prices may need to rise above €100 per megawatt-hour in December to replenish sufficient inventories for winter demand, according to Goldman Sachs analysts Samantha Dart and Laura Cyr.
The Strait of Hormuz shipping disruptions have caused a sharp drop in energy shipments from the Middle East, intensifying competition between Europe and Asia for limited liquefied natural gas (LNG) supplies. As a result, European buyers face procurement challenges.
Natural gas is a widely used fuel for power generation in Europe, but stockpiling has lagged this year, with Germany's gas storage facilities at 49% capacity, the lowest level since records began in 2011. Current price levels are 'insufficient' to get through winter, the analysts wrote.