Europe gas and power markets short-term outlook Q2 2024

Recent elevated prices reflect supply-side risk. However, downward pressure on Q3 2024 prices is expected as high storage levels by mid-summer put Europe in a strong position to reach full capacity by the start of this winter. Limited global LNG supply growth and increasing Asian LNG demand contribute to lower European LNG imports. The loss of Russian volumes following the end of the Ukrainian transit agreement and growing Asian LNG demand support higher TTF prices in 2025. Subject to the cut in Russian supply, Central European markets may look for alternative supply routes. As new global LNG supply led by the US and Qatar enters the market in 2026, competition for LNG procurement will ease. Our view of lower prices reflects high European storage inventories and price levels that Asia and other regions require to absorb new LNG supply. Several moving risks to supply and demand persist throughout the outlook, driven by geopolitical, economic and technical factors.