Natural gas production curtailment in Israel due the ongoing conflict is likely to tighten global balances, but the impact on European gas prices is marginal for now, Goldman Sachs said, Reuters reported.
“Tightening of global LNG balances as marginal for TTF prices for now, as its net supply impact to NW Europe, the region that sets the TTF price, is smaller than the total size of the disruption,” Goldman Sachs said in a note.
Oil and natural gas prices were boosted around the world on Monday due to the fresh conflict in the Middle East and strike action by workers at liquefied natural gas (LNG) export plants in Australia.
Mild weather so far this month has offset the scale of this potential LNG supply disruption, it added.
However, the bank sees risks to European natural gas prices skewed to the upside, given the uncertainly around the duration of the gas production disruption, and with added uncertainty regarding the geopolitical ramifications of the ongoing Middle East conflict.