Citi Forecasts European Natural Gas Prices Amid Middle‑East Risk
Citi analysts estimate that the benchmark Dutch TTF winter 2026‑27 price could reach €85 per megawatt‑hour if a Middle‑East conflict escalates but liquefied natural gas (LNG) infrastructure remains intact. In the event that LNG liquefaction facilities are damaged and taken out of service, the bank projects prices could climb to around €154/MWh. By weighting the probabilities of both scenarios, Citi arrives at an estimated price of about €103/MWh, compared with the prevailing level of roughly €95/MWh at the time of analysis.
If no escalation occurs, Citi expects winter 2026‑27 prices to trade in a €60‑€70/MWh range. The analysis assumes roughly a 25% chance that LNG facilities could be struck, and the market appears to be pricing similar escalation probabilities across the winter 2026‑27, 2027 and 2028 contracts.
Citi also highlights that calendar 2028 TTF contracts have risen approximately 60% over the past three months, an unusually large rally for contracts so far into the future, bringing prices close to levels observed in 2022 after the Russia‑Ukraine war began. The bank suggests markets may be pricing the possibility that LNG liquefaction assets could remain offline for months or even years, alongside some short‑covering activity.
In a comparative view, Citi sees greater risk‑adjusted upside in U.S. benchmark Henry Hub gas prices than in European TTF should severe cold weather or a polar vortex materialise. Winter Henry Hub prices have fallen sharply, and speculative positioning among managed‑money investors is at the shortest levels recorded since early 2020.
The analysis notes that diplomatic efforts involving Qatar, Saudi Arabia and China, as well as developments surrounding Israeli elections, remain important factors that could influence the outlook.