Natural gas and electricity prices are rising across Europe, primarily driven by increased heating demand, with wholesale gas price increases expected to impact retail electricity costs.
According to Euronews, European gas prices reached €46 per MWh in November, marking a 16% month-on-month increase due to cold weather, reduced wind power generation, and the ongoing war in Ukraine.
TTF futures contracts for December were trading at €47 per MWh on November 22, showing a sharp recovery from February’s three-year low of under €25 per MWh. For context, prices had peaked at nearly €345 per MWh in summer 2022.
Goldman Sachs forecasts a colder European winter compared to last year, projecting heating demand to increase by 46 million cubic metres daily year-on-year.
The bank predicts storage levels could fall to 40% capacity by March 2025, compared to 53% in March 2024.
Consequently, Goldman Sachs has revised its 2025 TTF price forecast upward to €40 per MWh from €34 previously.
Under extreme scenarios, including LNG project delays, stronger Asian demand, or colder-than-average weather, the bank warns European gas prices could surge to €77 per MWh. (incyprus)
