SHEL - Morgan Stanley attempts to forecast European gas balances without Russian supply

Morgan Stanley is the first bank to make an attempt at forecasting European natural gas balances without supplies of Russian fuel. The bank believes that a combination of demand destruction and increased LNG imports will be required to balance markets. Noting that prices for gas in Europe are likely to stay higher for longer than futures markets are currently forecasting.  On Morgan Stanley's numbers, Europe consumed 484 billion cubic meters "bcm" of natural gas in 2021, with a full 31%, or 149bcm, coming from Russia via pipeline and LNG. By 2025, the bank sees demand for gas in Europe falling 10% and LNG imports rising 43%, or ~54bcm. To incentivize LNG imports, Morgan Stanley forecasts ~$30 gas in 2022, ~$25 in 2023 and ~$20 gas in 2024.  The analyst highlights that north Africa and "other" pipe imports, currently meeting 27% of European demand, are set to decline in coming years.

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Morgan Stanley attempts to forecast European gas balances without Russian supply