Europe's Gas Prices Must Surge to Avoid Winter Shortages
Europe's natural gas storage levels are at their lowest in nearly two decades, and Goldman Sachs analysts warn that prices need to jump significantly by December for European storage to fill up with enough inventory for winter. The current benchmark natural gas price at the Dutch Title Transfer Facility (TTF) is $78 per MWh, but Goldman Sachs estimates it would need to reach $116 per MWh in order to incentivize accelerated stockbuilding.
The Strait of Hormuz crisis and increased competition from Asia have led to a squeeze on LNG supplies, causing prices to spike. Europe's current storage levels are about 62% full, which is below the five-year average. Goldman Sachs analysts estimate that December 2026 TTF would need to move above €100/MWh in order for Europe to manage storage through winter.
Goldman Sachs' base case is for natural gas prices to remain at €50/MWh, but they estimate that the actual price could be as high as €116 per MWh by December. This would be a significant increase from the current price, and would likely have a direct impact on European consumers.