Europe Fully Winter Ready Without Russian Gas

by Olha Povaliaieva
Wednesday, September 14, 2022
Europe Fully Winter Ready Without Russian Gas

"Goldman Sachs" analysts say Europe has already done the hard work of preparing for the heating season and will easily survive the winter without Russian gas

According to expert data from Goldman Sachs, over the following months, the price of natural gas will decrease by more than 2 times. The reason for this is Europe's high level of preparation for the upcoming heating season. For northwestern Europe, the base prices will gradually decrease, and by the first quarter of January, taking into account the average temperature during this period of the European winter, they will come to around 100 euros per megawatt hour. Today, the forward curve predicts a natural gas price of about €200/MWh, and for October — already €192/MWh.

"Their forecasts rest on the view that Europe has essentially done the hard work already in preparing itself for the peak demand season, filling storage faster than usual with aggressive purchases on the global market for liquefied natural gas to replace the imports that are no longer coming through Russian pipelines," American business publication

Analysts say that the aggressive rise in prices this summer has already provoked a gas demand reduction. This is especially true for industrial customers.

"As we go through winter, we expect the high storage levels at the start of the season to accommodate larger-than-average storage withdrawals. We expect the EU's storage facilities still to be 20% full at the end of March. As a result, a sense of market relief for having made it through winter will take over from the current sense of urgency to destroy demand," Goldman Sachs.

It should be noted that even €100/MWh is 6 times higher than in the same season of the previous year. Today this is a challenge to the competitiveness of Europe's industry.

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