Goldman Sachs has significantly revised upward its near-term forecast for European natural gas prices, citing a slower-than-expected normalization of Persian Gulf liquefied natural gas exports amid ongoing tensions in the Middle East, according to a report by Oil & Gas 360 dated July 21, 2026. Goldman Sachs analyst Samantha Dart now assumes Persian Gulf LNG exports will normalize in October, pushing back a previous estimate of July. The revision reflects continued disruption to shipping through the Strait of Hormuz, a critical global chokepoint that handles roughly one-fifth of the world's petroleum consumption and approximately 20% of global LNG exports.
Dart estimates the resulting reduction in balance-of-summer global LNG supply at 16 million tonnes per annum, representing a 4% decline, which is expected to leave Northwest European gas storage near 67% full by the end of October — the traditional start of the winter heating season — down from a prior estimate of 74%. Storage is then projected to end the winter period, in late March, at 28% full, assuming average seasonal temperatures. In response to the tighter supply outlook, Goldman Sachs raised its forecast for Dutch TTF gas prices for the balance of the third quarter and fourth quarter of 2026 to 60 and 53 euros per megawatt-hour, respectively, up sharply from previous forecasts of 41 and 40 euros.
The bank also lifted its full-year 2027 forecast to 31 euros per megawatt-hour from 30 euros previously. "With our estimated tightness in winter gas balances in Europe leaving little room for error, we expect that, for the remainder of this summer, TTF will price very close to the 65 EUR/MWh threshold," Dart said, referring to a price level the bank believes discourages Asian LNG demand and serves as a key demand-destruction ceiling. Dart noted that near-term risks to the forecast remain skewed to the upside, and Goldman Sachs continued to recommend that gas users hedge against potential winter price spikes.
Under a scenario in which Middle East energy exports normalize only gradually through 2027, the analyst estimates TTF would need to move above 100 euros per megawatt-hour to sufficiently curb competing Asian demand. Conversely, a faster-than-expected recovery in Hormuz shipping flows could see prices retreat to around 40 euros per megawatt-hour, in line with the coal-to-gas switching threshold, the analyst added. Looking further ahead, Goldman Sachs maintained its longer-term bearish outlook, forecasting TTF at 19 and 16 euros per megawatt-hour for 2028 and 2029, respectively.
However, the bank cautioned that this bearish projection is contingent on the Strait of Hormuz being fully open for shipping. Additional downside risks identified by the bank include new U.S. LNG export projects coming online and potential increases in coal and renewable power generation across Asia.
Source: Oil & Gas 360 / Investing.com
Source: oilandgas360.com