- Wednesday, October 16, 2024
Citigroup has revised its estimates for global natural gas prices due to a mild winter that has limited demand for the fuel. In a report by Citi Research, analysts stated that the weather has been milder than usual in North America, Europe, and Asia. Unless unexpected cold fronts hit and linger in these regions, prices are expected to decline seasonally until late Q1 or early Q2.
These new estimates align closely with the 5% warmer winter scenarios outlined by Citi in November. The base case for Henry Hub prices in Q1 is now $2.30 per million British thermal units, weakening to $2.10 in Q2 and Q3. For the entire year of 2024, Citi reduced its estimate from $3 per million British thermal units to $2.40.
While there is a possibility of increased US prices later this year due to another hot summer, particularly in Texas, robust industrial growth, and strong exports to Mexico, the report suggests that strong US production will limit any upward price movement.
On the other hand, European and Asian prices could see more upside from Q2 as Europe aims to replenish its storage and supply risks may also emerge. Citi's estimates for Dutch TTF prices in 2024 have been adjusted to 36 euros per megawatt-hour, down from the previous 46 euros. Additionally, Asian JKM LNG prices are now projected at $12.80 per million British thermal units, as opposed to the previous estimate of $17.30.
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