European Gas Market Forecast – February 2021

We are pleased to attach our latest European Gas Market Forecast for February 2021. Along with substantial commentary on key market movements, this quarterly update presents our updated outlook on European natural gas prices to 2050.

Key highlights of the report include:

  • European gas prices are expected to average 18€/MWh in the period 2021-2025, broadly in line with our previous forecast. Gas prices in 2021 have increased due to a supply shortfall amid rising winter heating demand. But a steep backwardation in futures due to expected LNG summer flooding weighs on prices for the remainder of the period
  • European price is forecast to rise from 21€/MWh in 2026 to 24€/MWh in 2030, and 27€/MWh in the early 2040s, driven by fast-growing Asian demand and Europe’s rising net imports, combined with increasing production costs of natural gas and LNG
  • Relative to our previous forecast, gas prices are 0.5€/MWh (or 2.0%) lower on average in the period 2026-2050, due to a rise in the EUR/USD rate

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