European natural gas prices have declined after Goldman Sachs Group Inc. warned about the risks of falling quotes, which recently hit a yearly high. On Wednesday morning, futures dropped by 2.7%.
As reported by Bloomberg.
It is noted that Goldman Sachs' baseline scenario anticipates the cessation of Russian fuel transit through Ukrainian pipelines after the current agreement expires at the end of the year.
“Any deviation from the status quo will mean an increase in Russian supplies compared to the consensus forecast, thereby putting pressure on global gas prices,” stated analyst Samantha Dart.
The market has already shown a sharp reaction to news of a potential deal in September when prices temporarily fell by 9.1% following reports about negotiations for Azerbaijani gas supplies via Ukrainian pipelines.
Additional pressure on prices may arise from liquefied natural gas supplies from the new Russian project Arctic LNG 2, despite American sanctions. In such scenarios, prices could drop to “low-mid 20 euros” per megawatt-hour.
Currently, European gas storage facilities are 95% full, and the demand for heating remains low due to unusually warm weather. Increased production of renewable energy also contributes to the reduction in gas consumption.
As of 11:55 Kyiv time, gas futures were trading at 41.90 euros per megawatt-hour, which is 2.3% lower than the previous close, although prices reached their highest level since December on Tuesday.
Background. Earlier, Mind reported that, according to a report from the Agency for the Cooperation of Energy Regulators (ACER), Russia's share in liquefied natural gas imports to the European Union increased to 20% in the first half of the year compared to 14% a year ago.