Goldman Sachs has revised its natural gas price forecasts for Europe, citing ongoing uncertainty around Middle East liquefied natural gas (LNG) supply and winter weather conditions. The bank now expects the first-quarter 2027 price to reach €74 per megawatt-hour, up from its previous forecast of €44, and the full-year 2027 average to hit €51, up from €32. Analyst Samantha Dart attributed the increase to a 45% probability of a low-supply winter for Middle East LNG, which could add €26 to the first-quarter price, along with a small cold-weather risk component worth €4.
The updated forecasts remain below current forward prices, which stand at €92 for the first quarter and €69 for the summer of 2027. Goldman noted that the first-quarter forward price implies a 47% market-perceived probability of a very tight scenario. TTF prices fell sharply on Monday from Friday’s €104 close, partially reversing earlier concerns about military escalation after the U.S. midterms, while short-range weather models turned more neutral.
Goldman’s base case assumes Persian Gulf LNG exports will gradually climb to 83% of normal by February. Qatar damaged 17% of its export capacity earlier this year and has guided to a multi-year repair. Exports averaged 33% of pre-war levels in October, though recent days have seen lower flows through Hormuz. If exports stay between 25% and 30% of normal through March and the winter in northwest Europe is colder than average, Goldman estimates first-quarter TTF could approach €150. Conversely, a warmer winter and improved supply could drop it to €45, essentially halting European competition for LNG with the rest of the world.
Demand destruction could help Europe preserve gas storage, but at a cost. Goldman estimates 2027 TTF would need to average €70 if Gulf exports stay restricted through the winter, and €104 if they stay below 35% of normal through 2027. Dart suggested that some of the upside risk is already priced in, but the recent drop in Hormuz LNG flows still favors hedging a tight winter through first-quarter 2027 TTF call spreads. Longer term, Dart said LNG balances look "increasingly soft" given recent additional export capacity decisions.