Goldman sees upside risk to EU gas prices this winter

Europe is heading into the heating season with its thinnest gas cushion in more than a decade. Disruption around the Strait of Hormuz is still choking off liquefied natural gas from the Gulf, and energy and diesel prices remain high. EU storage was 74.6% full on October 20, EconoTimes reported, even as the European Commission said the bloc had no current security-of-supply problem but warned of a difficult winter. Gas Infrastructure Europe data put those levels at their lowest since 2011, Euronews reported.en.thebell.io+1

Prices hinge on Qatar and weather

Goldman Sachs The Goldman Sachs Group, Inc. ↘ 1.75% sees "net upside risks to European natural gas prices." The bank noted that Middle Eastern LNG exports are running at about one-third of 2025 levels, according to a Goldman podcast published October 23. If Qatari flows recover, the benchmark TTF price could ease toward €70 per megawatt-hour. If exports stay low and the winter turns cold, prices could reach €150. Goldman expects Northwest European storage to fall to 19% by the end of March 2027 under average temperatures.goldmansachs.com+1

Goldman's Samantha Dart argues that the shock looks similar in scale to Russia's 2022 supply cutoff, but the market absorbing it has changed. Europe's lower appetite for gas may matter as much as its new supply sources, market strategist Stephen Innes wrote. Goldman's base case is still well below the 2022 peaks above €300.thedarksideoftheboom.substack.com

The strain extends past gas. Diesel and jet fuel are particularly exposed, and EU energy ministers will discuss possible bloc-wide demand cuts when they meet on October 29, according to a Council document seen by Euronews. The bloc's gas grid operators have warned of a shortfall of 12% to 15% of demand in a severe cold snap. Separately, IEEFA said the EU may need to cut winter gas demand by 7% compared with last winter.euronews.com+1

Russian fuel no quick fix

The squeeze has revived calls to bring back Russian energy. Germany's far-right AfD is pushing for Russian fuel to fill the gap, and US special envoy Steve Witkoff's peace plan includes a proposal for Europe to return to Russian gas, The Bell reported. In that analysis, Columbia University energy researcher Tatiana Mitrova argues that Russian supplies would not deliver the quick relief their backers promise.en.thebell.io

Some analysts expect Europe's ban on Russian LNG to outlast the Hormuz crisis. The Commission has already lowered its December 1 storage target from 90% to 80%. Even with average weather, LSEG analyst Yuriy Onyshkiv said northwest European reserves could fall to about 20% by April, US News reported. Combined with a long closure of the strait, that would put more pressure on restocking in 2027.money.usnews.com+1