E-world, Europe's largest energy trade fair, will bring together over 900 stakeholders from the energy and water sectors in Essen from February 10 to 12. Join us at our stand in Hall 2 - 2D100 Hall 2 during this event to connect with our experts, who are ready to share their market assessment and answer your questions about the evolving energy landscape.
This is also an opportunity to gain insights from our dedicated Energy Research, featuring special reports from Joel Hancock, Commodities Research Analyst, on the gas market, and Jean-Louis Malon, Head of EU Power Origination at Global Markets, on ongoing developments in Germany and the planned implementation of the capacity market from 2027.
We still expect the market to shift to oversupply in summer 2026,
with European injection demand insufficient to fully absorb the magnitude of LNG supply additions.
Joel Hancock
Joel, does Europe's gas market shift from scarcity to surplus?
The loss of Russian pipeline gas following Russia’s invasion of Ukraine has defined the European, and global, gas market since 2022, triggering a market dynamic defined by demand destruction – rationalising global gas consumption to offset lost molecules.
With substantial LNG volumes entering the market through 2026, and the supply wave continuing through to 2029, the market will shift to an oversupplied regime defined by demand creation, with prices moving lower to incentivise gas consumption.
But timing the transition to the new, lower priced market regime remains elusive, particularly with cold weather through the winter so far draining inventories at a much faster pace when compared to last year, supporting TTF prices.
Do you still see lower gas prices in 2026, despite the strong start to the year?
Yes, we still expect the market to shift to oversupply in summer 2026, with European injection demand insufficient to fully absorb the magnitude of LNG supply additions. In order to balance the market, excess cargoes will need to be absorbed in more price-sensitive Asian markets, with switching between oil products and gas a critical dynamic. We expect TTF to average €28/MWh in 2026.
What are the risks to this outlook?
Our view outlined above is dependent on new LNG facilities coming online to schedule – Golden Pass in the US is a critical project to watch, as is the performance at LNG Canada. Towards the end of the summer and into Q3-26, any delays to Qatar’s North Field expansion project would trigger bullish sentiment.
How about carbon prices, which have started the year very strongly?
We remain constructive on EU Allowances (EUAs) in 2026, with policy driven tightening as well as a reduction in free allowances triggering more pressure from the supply side this year. However, we point to the heavy long positioning from speculative market players in EUA futures, the build-up of which has driven most of the recent rally. We expect some rationalisation, with prices expected to average €85/tonne in 2026.
Thank you Joel
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