European natural gas prices fell after Goldman Sachs warned of downside risks.
Benchmark futures fell as much as 2.7% in early trading.
If the market continues to buy more Russian gas than expected, prices could fall by almost half from current levels, according to Goldman Sachs analysts.
Goldman’s base case is that Russian fuel will stop flowing through Ukrainian pipelines when a transit agreement between the two countries expires later this year, analyst Samantha Dart said.
“Any deviation from the current situation would mean higher Russian supply compared to consensus and therefore weaker global gas prices,” Dart said.
Dutch front-month futures, Europe’s natural gas benchmark, were trading 2.3% lower in the morning in Amsterdam at 41.90 euros per megawatt-hour. Prices hit their highest level since December on Tuesday.