Goldman Sachs has revised upward its price projections for European natural gas in 2027, pointing to what it describes as a still highly uncertain supply outlook from Middle East LNG producers and a wide range of possible winter weather outcomes. The bank also said the balance of risks to its 2027 forecast is biased to the upside.
In the latest set of forecasts, Goldman adjusted its first-quarter 2027 Dutch Title Transfer Facility (TTF) estimate to €74 per megawatt-hour, up from a prior €44. The bank also raised its average TTF forecast for 2027 to €51 from €32.
Analyst Samantha Dart attributed the increase to two main components: a subjective 45% probability that Middle East LNG supply will be low through the winter, which Goldman values as adding €26 to the first-quarter TTF estimate, and an additional cold-weather risk component valued at €4 in the quarter.
Despite the upward revisions, Goldman noted its forecasts still sit below current forward prices, which the bank cited at €92 for the first quarter of 2027 and €69 for summer 2027. Goldman said that the first-quarter forward level implies the market assigns roughly a 47% probability to a very tight supply scenario.
Recent market moves have shown volatility. TTF prices dropped sharply on Monday from a Friday close of €104 as headlines suggested a possible diplomatic initiative that partially eased earlier fears about military escalation after the U.S. midterm elections, and as short-range weather models turned more neutral. Dart summarized the situation on winter outcomes, saying:
"The range of outcomes for TTF this winter remains exceptionally wide."
In Goldman’s baseline scenario, exports of LNG from the Persian Gulf gradually recover to an operational maximum equal to 83% of normal by February. The bank reiterated that Qatar sustained damage to about 17% of its export capacity earlier in the year and has indicated repairs will take multiple years to complete.
Goldman reported that exports averaged 33% of pre-war levels in October, a figure 13 percentage points higher than the bank’s base case, though flows through the Strait of Hormuz have been lower in recent days.
The firm set out alternative stress scenarios. If Gulf exports remain at 25% to 30% of normal through March and northwest Europe experiences a winter one standard deviation colder than average, Goldman estimated first-quarter TTF could approach €150. Conversely, a warmer winter coupled with improved supply would reduce first-quarter TTF to around €45, a level Goldman said would effectively end Europe's competition with the rest of the world for LNG cargoes.
Dart noted that demand destruction could help conserve European gas storage levels, but stressed that such an outcome comes with economic costs. On longer-run averages, Goldman calculated that 2027 TTF would need to average €70 if Gulf exports remain constrained through the winter, and would need to reach €104 if exports stayed below 35% of normal for the entirety of 2027.
With some upside risk already reflected in market prices, Dart nevertheless recommended protective positioning. She said the recent reduction in LNG volumes transiting Hormuz makes hedging a tight winter through first-quarter 2027 TTF call spreads a favorable strategy.
Looking further ahead, the analyst observed that LNG market balances appear "increasingly soft" in light of recent decisions to add export capacity, a development she cited without quantifying broader effects beyond the immediate forecasts and scenarios outlined above.
Analyst: Samantha Dart