Northwest Europe gas storage may remain low for winter, Goldman Sachs warns

Goldman Sachs group

Tue 04:52

Oct 19 (Reuters) - Northwest European gas storage is likely to remain low for winter despite stronger Norwegian production unless Middle East LNG supplies pick up, Goldman Sachs said on Monday.
Here are more details:
Norwegian gas exports to NW Europe have climbed back to the 2022 highs, analysts at the bank said in a note
The bank said higher Norwegian flows have lifted NW Europe's storage levels to 63% up from 62% a week earlier
Persian Gulf LNG exports to recover gradually through winter, reaching 65% of pre-war levels in January 2027, but uncertainty over Middle East supplies is increasingly being priced into the market, Goldman Sachs said
December 26 TTF contract, currently at 88 EUR/MWh, implies a 51% chance that Hormuz LNG flows this winter average only 25% of normal, well below Goldman's base case and up from 47% last week
The bank said it wants more evidence that LNG flows through the Strait of Hormuz are recovering before it assumes European gas prices will shed their Middle East supply risk premium, which it puts at €18 per megawatt hour (MWh)
The benchmark Dutch front-month contract at the TTF hub TFMBMc1 hit €89.70/MWh on Monday, its highest since December 2022, ICE data showed

(Reporting by Sherin Sans and Swati Verma in Bengaluru; Editing by Harikrishnan Nair)
((Sherin.Sans@thomsonreuters.com;))