Some Goldman Sachs comments on European natural gas are getting attention today but they're obsolete almost as quickly as they've come out.
They say the 20% flows through Nord Stream 1 that are taking place now suggest near-term upside to TTG natural gas prices to €190/mWh.
Well that was certainly an undershoot because gas prices are up €35 to €211 today alone in the second day of large gains. The gains came after a report citing unnamed sources saying Russia would continue weaponizing gas flows and that a disappointing EU voluntary agreement on curbing use.
Looking further ahead, Goldman Sachs sees European gas prices ultimately driven higher next summer and that a sustained lower-price environment is not likely until 2025 when LNG supplies to begin increasing significantly.
As for the fallout for European growth, I would see prices around here as dire. European industry can't compete with countries that are paying 10x less for energy and the political and government-budget fallout will be messy.
