Goldman Sachs warns: The situation in the Middle East disrupts inventory replenishment, European gas may soar to 100 euros in December

The Zhitong Finance App learned that Goldman Sachs Group said that European gas prices may need to rise above €100 ($117) per megawatt hour in December before the continent can rebuild sufficient stocks to survive the upcoming winter.

Analysts Samantha Dart and Laura Seale wrote in a report that even if European gas benchmark, Dutch futures prices recently rebounded recently, if supply disruptions in the Middle East continue until next year, this will not be enough to attract enough liquefied natural gas (LNG) from Asia. Last week, the futures rose to a five-month high, exceeding €65 per megawatt hour.

As the US-Iran war led to a sharp drop in shipping volume through the Strait of Hormuz, European buyers faced procurement challenges in fierce competition with Asia for limited LNG supplies. Natural gas is widely used to generate electricity in mainland Europe, and inventory replenishment is usually carried out during the summer months, but progress this year is lagging behind usual.

Analysts said in a Sunday report that based on current consumption and replenishment rates, the reserves of natural gas storage depots in northwestern Europe will reach a full load rate of 51% at the end of this month, which is 3.4 percentage points lower than Goldman Sachs' benchmark forecast.

At a time when Europe is under pressure to replenish natural gas stocks before winter demand rises, conflicts in the Middle East have severely limited global energy flows. With no sign of a solution in sight, US President Trump has announced plans to carry out what he calls an “economic Normandy landing day” attack on Iran.

Analysts wrote that at current price levels, “not enough to support Europe to manage gas inventories and get through the winter.” They added: “Under the assumption that Middle East energy exports will not gradually return to normal until 2027, we expect TTF gas prices to rise above €100 per megawatt-hour in December 2026.” They noted that this is 110% higher than Goldman Sachs's benchmark forecast of 50 euros per megawatt hour.

However, Europe's glimmer of hope may come from weather forecasts. Although Goldman Sachs's latest outlook assumes average winter temperatures, a report released by Ruishida Energy this month indicates that if the “super” El Niño phenomenon causes the temperature to be at least 2 degrees Celsius (3.6 degrees Fahrenheit) above the historical average, demand for natural gas may decrease to make up for the impact of low inventories.