Natural Gas: Higher price forecasts on LNG squeeze – Commerzbank

Norman Liebke at Commerzbank has revised Gas and German power price forecasts higher, citing tighter European storage, increased reliance on LNG and structural constraints on Qatari exports. The phase-out of Russian Gas from 2027 adds upside risk. Year-end Gas is now seen at EUR 50 per MWh and German power at EUR 110 per MWh, with only partial easing by end-2027.

European LNG and Russian phase-out

"We have revised our gas and power price forecasts upwards."

"We now expect the gas price to stand at EUR 50 per MWh at year-end (previously: EUR 45), while our forecast for end-2027 remains unchanged at EUR 40 per MWh."

"Moreover, even after a sustained reopening of the Strait of Hormuz, Qatari LNG production - and thus exports - will remain restricted by one fifth over the next three to five years due to the partial destruction of Qatar’s Ras Laffan LNG facility."

"A further upside risk to prices is the phase-out of Russian gas imports, which was approved in January and will take effect from early 2027 for LNG and from autumn 2027 for pipeline gas."

"We have also revised our forecast for the German power price (month-ahead) upwards accordingly."