Goldman Lower TTF Winter and Summer Forecast on Easing Balances

Goldman Sachs has lowered the TTF forecast for the balance of winter from 47€/MWh to 43€/MWh amid easing gas supply balances. Natural gas supply balances in Europe are better than expected in early winter due to higher renewable generation and household conservation efforts.

• The gas supply balance will ease into next year leading to a drop in the summer 2024 forecast from 45€/MWh to 41€/MWh.

• Winter weather provides upside risk due to the small storage buffer and max gas to coal switching already implied by forward prices.

• The gas supply balance will be marginally tighter yoy in 2024, due to modestly higher domestic demand and more LNG competition from Asia.

• Asian LNG demand is set to rise to an annual record in 2024 of 283m tons with China to increase by 9m tons next year.
• The start of new US export projects from late 2024 will lead to the first year of “the new bear cycle” in 2025. “We see 2024 as the last year of the current bull cycle for European gas and LNG, to be followed by a much softer second half of the decade as global LNG supply capacity increases significantly from 2025.”