European gas prices could treble, says Goldman Sachs

Goldman Sachs (NYSE:GS) said European gas prices could treble this winter.

Gas prices are currently as low as €36 per megawatt hour, some way of last August’s peak of €321p/Mwh.

Analysts at the Wall Street bank believe prices could rise to above €100p/Mwh, a level not seen since December 2022.

Prices have fallen as nations built up reserves to ease reliance on imports from Russia in response to the war in Ukraine.

“The combination of winter weather risk and potentially decline conservation efforts by households can quickly tighten balances, enough to trigger a sharp rise in winter prices above €100,” analysts noted.

“Even if industrial demand remains sluggish this summer, this is not a guarantee that storage will be comfortable throughout this winter,” `Goldman said.

Goldman argues that current low prices have led households to become carefree in their usage which could spark a rebound.

Surging prices would be welcome news to Vladimir Putin and Russia as the war in Ukraine rages on.

Russia supplied 12.9% of all gas imports as of November 2022, although this has fallen drastically from the 50% it provided at the start of 2019, according to the European Council.

An increase in prices would provide further income for to fund its war efforts.