European gas storage refill at risk in case of falling prices — Goldman Sachs

Goldman Sachs believes Europe can secure enough liquified natural gas (LNG) to replenish its inventories at current prices. However, the region will face supply competition in case of a further drop in prices. 

So far this year, Europe has drawn in more LNG cargoes, partially due to decreasing demand in Asian countries. China, last year’s top importer of liquified gas, has slashed purchases as a result of growing pipeline supply, high inventories, and rising prices. Yet, this trend could change if LNG becomes cheaper than alternative fuels in Asia, Bloomberg says.

Goldman Sachs analysts project future increases in LNG supply, driven by exports from the US and Qatar, will lead to a surplus in the market. The oversupply will be apparent from 2027 and is expected to grow for the rest of the decade. At the same time, the availability of cheap natural gas may contribute to an additional rise in demand for a few years, the experts say.