According to the Securities Times app, European natural gas futures prices fell sharply from the year's high on Wednesday. Earlier, Wall Street major bank Goldman Sachs warned that the recent surge in European natural gas prices to this year's highest point poses a significant downside risk in a "bear market style." The European natural gas benchmark price - TTF natural gas futures prices fell 2.7% in early Wednesday trading. Goldman Sachs' analysis team stated that if the market continues to receive more Russian pipeline natural gas than expected, the potential for European natural gas prices may decrease by almost half from the current levels.

As of press time, the European natural gas benchmark price - Dutch TTF near-month natural gas futures price fell 2.3% to 41.90 euros per megawatt-hour, dropping to a low of 41.70 euros per megawatt-hour. On Tuesday, the benchmark natural gas price reached its highest level since December last year, also the highest level this year. European natural gas prices have continued to rise this year, mainly due to deteriorating geopolitical situations, the Russian pipeline natural gas transportation facing a complete shutdown crisis, and stimulating factors from winter heating demand. In addition, with Russia banning energy exports to almost all Western countries in recent years, the ongoing global LNG market supply tightness has also affected European natural gas prices.

Goldman Sachs analyst Samantha Dat from mentioned in a report that the basic forecast of the Goldman Sachs analysis team is that once the transit agreement for gas through Ukraine between the two parties expires at the end of this year, the flow of Russian pipeline natural gas through the Ukraine pipeline will be completely halted.

Her led analysis team wrote: "Therefore, any deviation from the baseline situation implies that Russia's natural gas supply will exceed consensus expectations, and such a situation pushes the potential for European natural gas prices to trend towards a bearish put style." Goldman Sachs analysis team emphasized that any increase in the scale of Russian pipeline natural gas inflow will bring further downside risk to European natural gas prices.

The market has reacted sensitively to the news of a possible agreement in September, when reports in the media on progress in negotiations on the supply of Azerbaijani natural gas through the Ukrainian pipeline led to a sharp drop in European natural gas futures prices by over 9%. However, since then, with no new developments, TTF natural gas futures prices recovered all losses and hit a new high for the year. According to the latest media reports, no substantive agreement has been reached yet.

Datt stated that if Russia supplies a limited amount of liquefied natural gas from its new LNG infrastructure, the "Arctic LNG 2" (already sanctioned by the USA), the price of natural gas in Europe may continue to decline. The Goldman Sachs analyst team she leads also added that any of these scenarios could potentially push the price of European natural gas down to as low as '20 to 25 euros per megawatt-hour,' bringing it into common competition with brown coal in terms of power generation scale.

In terms of natural gas inventories, natural gas stocks in Europe have reached as high as 95%, significantly curbing heating demand on the European continent due to untypically mild weather compared to previous years. Furthermore, the unusually strong scale of renewable energy generation, especially the exceptionally large scale of wind power generation on the European continent, also helps reduce the actual use of natural gas for power generation, and the recent import volume of liquefied natural gas on the European continent is far below last year's levels.

Additionally, the hostile actions in the Middle East region have significantly eased, increasing the downward pressure on European natural gas prices this week. However, traders remain highly alert to the potential deterioration of the geopolitical situation.