The Oil Gusher Even ‘hotter’ winter ahead in European gas

The Oil Gusher Even ‘hotter’ winter ahead in European gas

18 September 2026 Key takeaways Equity • Upgrade EQNR + HBR from Neutral to Buy on greater uplift to estimates on above- Pan-Euro strip gas price forecast into winter and 2027 Oils • EUR25/MWh and $70/bbl Brent mid-cycle unchanged; we also reiterate Buy ratings on Christopher Kuplent >> TTE, GALP, ITH, ENOG + preference for OFS Research Analyst MLI (UK) • More upside risks for Europe's TTF gas price driven by Qatari LNG start-up delays, low seasonal storage and winter elasticity Matthew Smith >> Research Analyst We see upside to Europe’s gas price strip into winter MLI (UK) Europe’s gas storage remains at historical lows just weeks before heating season kicks off – at 68% full vs. 84% 10-year average. Europe’s TTF gas spot prices are up 178% Cian Evans-Cowie >> Research Analyst YTD and currently trade at >$150/boe (as well as ~9x Henry Hub). However, TTF remains MLI (UK) backwardated into the winter and below Asia’s JKM hub gas price. Our Commodities Research team now expects TTF gas prices to increase by another 25% this winter – in our view with risks stacked in favour of Hormuz upside vs. El Niño downside.

Four years later: Another ‘hot winter’ ahead in Europe Exhibit 1: We update our POs after We note today’s elevated TTF gas prices in Europe only trade ~75% below 2022 peaks – including latest BofA macro forecasts Changes to BofA POs partly thanks to not repeating panic-buying on the loss of Russian pipeline gas imports then. But the latter was not just offset by increasing LNG imports by ~50%: Europe’s Big Oils Currency PO (new) PO (old) gas demand today still stands >16% below 2021 levels – with incremental demand BP GBp 500 500 Shell GBp 3550 3550 destruction in our view even more expensive today given both nuclear and coal power TTE EUR 87 87 plant shutdowns as well as industrial activity losses recorded since. But without lifting Eni EUR 24 24 our mid-cycle forecast from 2028 onwards, what’s already priced into stocks? Equinor NOK 465 400 Repsol EUR 25 25 Upgrade Equinor and Harbour Energy to Buy Galp EUR 23 23 Our new TTF gas price deck drives our annual average FCF estimates up by ~5% into OMV EUR 58 58 Neste EUR 25 25 2027 – with greatest aggregate 2026-27 upgrades among Big Oils at Equinor (+22%) ADRs Currency PO (new) PO (old) and among E&Ps at Harbour (+66%). As a result, we now see even more upside to BP USD 41 41 consensus estimates – as high as 143% on Equinor’s 2027 FCF. The resultant changes Shell USD 96 96 to our POs leave TTE, EQNR, GALP, HBR, ITH and ENOG as the only Big Oils / E&Ps TTE USD 100 100 under our coverage not already discounting more than our (unchanged) mid-cycle Eni USD 55 55 Equinor USD 49 43 $70/bbl Brent and <$9/mbtu TTF assumptions from 2028 onwards. Repsol USD 29 29 Neste USD 14 14 Reiterate Buy on GTT as key LNG beneficiary E&Ps Currency PO (new) PO (old) GTT’s order intake has accelerated as we anticipated: 72 LNGC membrane orders YTD ENOG (UK) GBp 930 930 surpassing the FY25 result of 37 – with more to come, underpinned by record LNG ENOG (ILS) ILS 37 37 project approvals in 2025. Next? Our global LNG project tracker adds to our conviction Ithaca GBp 305 295 Harbour GBp 350 280 for further records ahead with 85mtpa potential FIDs in each 2026 and 2027 (see Var Energi NOK 50 47 Exhibit 24). GTT is our key LNG supply growth beneficiary, with 100% market share. Serica GBp 235 230 EnQuest GBp 24 22 Aker BP NOK 215 210 >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst Kosmos (UK) GBp 126 126 under the FINRA rules. Kosmos (US) USD 1.7 1.7 Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take Tullow GBp 9.3 9.3 responsibility for the information herein in particular jurisdictions. BofA Securities does and seeks to do business with issuers covered in its research Source: BofA Global Research estimates reports. As a result, investors should be aware that the firm may have a conflict of BofA GLOBAL RESEARCH interest that could affect the objectivity of this report. Investors should consider this See page 13 for jargon buster report as only…