Northwest Europe gas storage may remain low for winter, Goldman Sachs warns
UNG•Northwest European gas storage rose to 63% from 62% a week earlier but may remain low for winter unless Middle East LNG supplies recover. Goldman Sachs estimates a €18/MWh supply-risk premium, while the Dutch front-month contract reached €89.70/MWh, its highest since December 2022.
1. Storage and supply risks
Norwegian gas exports to Northwest Europe have returned to 2022 highs, lifting storage to 63%, Goldman Sachs analysts said. The bank expects Persian Gulf LNG exports to recover gradually through winter, reaching 65% of pre-war levels in January 2027, but said uncertainty over Middle East supplies is increasingly priced into the market.
2. Prices reflect uncertainty
The December 2026 TTF contract at €88/MWh implies a 51% chance that Hormuz LNG flows average only 25% of normal this winter, up from 47% last week, Goldman Sachs said. The bank put the Middle East supply-risk premium at €18/MWh and said it wants more evidence of recovering flows through the Strait of Hormuz before assuming European gas prices will shed that premium. The Dutch front-month TTF contract reached €89.70/MWh on Monday, its highest since December 2022.
