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European Gas Prices Could Fall as Low as 21 €/MWh in Summer

NATURAL GAS

European gas prices could fall as low as $6.70/MMBtu or 20.90 €/MWh, according to Montel, citing Wood Mac.

  • Driving down prices is the continuation of high storage levels, although the trajectory of Russian flows will affect market balances.
  • Gas storage is not expected to drop below 55% before the market moves to net injections. This could put storage at 89% by July.
  • This would put storage in touching distance of the 90% target level well before the Nov. 1 deadline.
  • The result could be a supply overhang of up to 10 bcm.
  • European demand is expected to rise by 9bcm on the year in 2024, with industrial demand seen rising by 5.5 bcm. Gas for power generation will likely fall by 9bcm.
  • A full curtailment of Russian flows could limit the storage capabilities of the EU in 2025, adding some support to prices.

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