Goldman Sachs analyst: gas may be halved in price

Photo of Judita Grigelyts (V).

Although most analysts predict that the price of natural gas in Europe will be high or even extremely high, according to one well-known investment bank, gas may be 50% cheaper than it is now.

The price of natural gas in Europe could halve from current levels in the coming months as consumers use less and build up large inventories, according to Samantha Dart, an analyst at Goldman Sachs.

S. Dart also predicts that the price of gas will again rise to the current level next summer, as oil will start filling gas storages again, notes the investment journal Barron’s.

Over the past year and a half, gas prices in Europe have risen sharply, and in August, after Russia decided to cut off gas supplies to Europe via Nord Stream 1, the price rose to a record level. About a third of the gas received by Russia was delivered to Europe via the Nord Stream gas pipeline.

The price of gas is so high that, according to some analysts, the bills will triple. Natural gas is widely used to heat homes, produce electricity and steel. According to him, gas prices will remain high throughout 2023. and some amount only at the end of next year.

The price of the natural gas futures contract for the first quarter of next year is 199.5 EUR per megawatt-hour (MWh), which is roughly the same as now.

Therefore, according to S. Dart, the price of gas will reach 100 EUR/MWh in the first quarter of next year. She believes that Europe has solved the gas problem because it has accumulated more gas than predicted. European gas storage capacity is already 82%, and will increase to 90% by the end of October. And consumption has already decreased both because of the new rules and because the economy is developing.

urnalo, where he quotes, according to S. Dart, something important has been omitted in the forecasts, so there is a risk that the situation may be accessible.

The incoming heat may be extremely cold, so heating may require more gas than expected. Russia can supply even less, for example, stop supplying gas to Italy.

On the other hand, attempts to offset the cost of growth with subsidies may encourage people to consume even more. All risks can arise from gas prices.

S. Dart predicts that next summer, when Europe starts to fill its gas storages again, the prices will increase again. According to the analyst, the reservoirs will be filled to 22% at the end of the year, which is necessary because the country will have a lot of expenses to buy gas, and will have to import more liquefied natural gas. Therefore, it is predicted that by next summer the price of gas will increase to 235 EUR/MWh and will be higher than the current futures indicate.

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