Analysts at Goldman Sachs (NYSE:GS) forecast the price of gas will more than likely halve this winter as European countries effectively tackle avoiding shortages.
The investment bank said it expects the price of gas to drop from €215 a megawatt hour to below €100MWh by the end of the first quarter of next year.
Goldman believes European countries will be able withstand Russian gas cuts as the winter supply headache may be “successfully solved.”
Nord Stream 1, the gas pipeline from Russia into Europe, has been shut down with no timeline given on when it will re-open.
However, a combination of “gas demand destruction” within Europe and across buyers elsewhere in the world, nations have built up above-average inventory levels, the bank's analysts calculated.
Storage facilities are expected to be 90% full on average by the end of October, before an EU-wide target of 80% full by 1 November.
Additionally, the analysts expect storage facilities will remain more than 20% full by the end of March next year.
Last month, Goldman said spiralling gas prices were the reason behind its prediction of 20% inflation in the UK, though after new Prime Minister Liz Truss capped average energy bills and with wholesale gas prices forecast to halve, it is likely that a lower peak inflation figure is now forecast.