goldman sachs predicts that european natural gas prices would drop by about 30 in the coming months as nations gain a temporary upper hand on supply issues the dutch title transfer facility ttf is europes main benchmark for natural gas prices it traded at around 120 euros per megawatt hour on tuesday but goldman sachs expects this benchmark to fall to 85 euros per megawatt hour in the first quarter of 2023 according to a research note published last week this would mark a significant change to the levels seen back in august at the time russias unprovoked invasion of ukraine and the subsequent pressures on europes energy mix pushed prices to historic figures above 340 euros per megawatt hour the recent cooling in gas prices has derived from several factors europes gas storage is basically full for this winter season temperatures this fall have been milder than expected thus delaying the start of a period of heavy usage and there is an oversupply of liquefied natural gas lng recent reports have pointed to about 60 vessels waiting to discharge their lng cargo in europe some of these shipments were bought during the summer and are just arriving now as storage fills up indeed the latest data compiled by industry group gas infrastructure europe shows storage levels in europe are sitting at 94 despite optimism on lower gas prices in the near term which may alleviate some of the costofliving crisis theres plenty of pressure on european leaders to secure supplies in the medium term our commodity team forecasts a further decline to 85 euros in the first quarter before sharply picking up into next summer as storage levels are rebuilt goldman sachs analysts said in the research note their forecasts point to a surge in prices to just below 250 euros per megawatt hour by the end of july natural gas prices are expected to pick up after the first three months of 2023 due to several factors fatih birol executive director of the international energy agency told cnbcs julianna tatelbaum friday that only a very small amount of new lng will hit the market next year if china economy sees a rebound next year the lng import of china may also increase together with europe he said china was the worlds top importer of lng in 2021 according to the us energy information administration however due to its strict covid19 policy the chinese economy has had to deal with a number of lockdowns which have dented growth any change in this political approach would increase demand for lng and push up prices for european buyers too additionally gas storage has been helped by russian supplies which the eu has been trying to ween itself off even xavier bettel the prime minister of luxembourg an eu nation acknowledged in october that storage was full with russian gas russian supplies have since been severely disrupted and its europes aim to be completely free from russian fossil fuels the ceo of edp portugals utilities firm summed it up when speaking to cnbcs squawk box europe friday certainly we are in a much better place than we were a couple of months ago miguel stilwell dandrade said but we should expect a lot of volatility going forward