The price of gas will escalate to 60 euros the megawatt hour (MWh) in the face of a “feared” cold winter that will deplete Europe’s gas reserves, which in turn will lead to electricity prices around 130 euros per MWh, as predicted by the general director of the consulting firm Tempos Energy, Antonio Aceituno.
The expert has stressed that “the gas market will also be vulnerable “in the face of a hypothetical sharp spike in fighting in the Middle East, which could cause gas prices to skyrocket to 100 euros per megawatt hour for a short period of time.”
“However, current prices have already incorporated much of the geopolitical tension of that region, so the current maximums of 40 euros per MWh seem to be the ceiling accepted by everyone,” he clarified.
Even though geopolitics are playing a key role in the volatility of gas prices, these have remained stable since July 27 in the range of 32 and 40 euros per MWh, which means that, despite all the risk factors that threaten the gas market, prices have a relative margin of movement of eight euros per megawatt hour.
On the other hand, to see a downtrend, “a large expected increase in gas exports to Europea question that does not seem likely, taking into account the consumer behavior of the Asian pole. “It is true that the ample levels of storage prior to winter, combined with the decline in industrial demand and a weaker economic outlook, are weighing heavily about trust,” said Aceituno.
In any type of possible scenario, The definitive answer will lie in the climate. At the moment, a mild period is expected for the next two weeks, which will provide a slight calm before a strong signal, “in fifteen days, We will be at the gates of November, with a hesitant winter“At some point, the weather will emerge as the absolute judge, potentially dragging gas in the short term to the level of 32 euros per megawatt hour, or even below,” the expert noted.
In this sense, the general director of Tempos EnergÃa predicts that, faced with a warm winter, the TTF “will break the barrier of 32 euros per megawatt hour, traveling to a floor of 24 euros”, which will result in pool prices “in around 70 euros per megawatt hour, dropping to 50 euros, if wind power pushes above 25%“.
Tension in the market
With a view to electricity futures, the tension in the gas market remains latent, with the TTF contract expiring next month reaching highs of 40.96 euros per megawatt hourthe highest price in nearly eleven months. However, “the markets are discounting a highly important fact: the arrival of more renewable supply in autumn and winter,” he noted.
For this reason, electricity futures for the first, second and fourth quarters of 2025 do not appear correlated with gas contracts since September 19 of this year, drawing a practically horizontal line in the levels of 69.90 euros per megawatt hour47.82 euros and 78.61 euros per megawatt hour, respectively. However, as expected, the summer of 2025 grows by 8.45% -6.25 euros per megawatt hour- from the indicated date.
As explained by the general director of Tempos EnergÃa, the crude oil market “is currently supported by the increase in geopolitical tension, with the ssignificantly slowed climbs by macroeconomic vectors”.
Brent, weak in the face of geopolitical tension
In this international panorama, Israel’s next response takes on special relevance in the face of Iran’s past missile attack, it must decide between attacking Iran’s crude oil and causing serious consequences for the world economy, or opting for another less painful path for its partners, mainly the United States.
For this reason, “the world of crude oil is forced to wait for Israel, in a context in which Brent currently has aa geopolitical premium between six and eight dollars“, Aceituno pointed out. From here, it is most likely that there will be no supply interruptions, due to two main reasons. The first of them is that China has ignored Western sanctions, importing record quantities from Iran — practically 90 percent–, so cutting off the Strait of Hormuz would turn against Iran, directing unnecessary punishment to its main client.
In the case of Israel, a forceful attack would provoke direct intervention by the United States, especially interested in maintaining as much calm as possible in the Middle East before the elections that will be held in less than a month.
Consequently, the expert has predicted that, “until Israel’s reaction is known, “Brent will continue trading around $77.”. “If an attack does not finally occur, crude oil prices could even fall below $70, as geopolitical tension is lost and we look again at oversupply,” he added.
However, in the event of a loss of flows, this would be punctual, causing prices to rise. up to the level of 100 and 110 dollarsbecause OPEC would put into operation its idle capacity, which currently reaches six thousand barrels per day.
