By Anthony Harrup
Citigroup cut its estimates for global natural gas prices as a mild winter limited demand for the fuel.
“Weather has largely turned out to be milder than normal in all three major markets-North America, Europe and Asia,” analysts at Citi Research said in a report. “Barring some unexpected strong cold fronts hitting and lingering in the U.S., Europe or Asia, prices should generally decline seasonally until late 1Q or early 2Q.”
Citi said the new estimates are close to its 5% warmer winter scenarios laid out in November.
The base case for Henry Hub prices in the first quarter is $2.30 per million British thermal units, weakening to $2.10 in the second and third quarters. For 2024 as a whole, Citi cut its estimate to $2.40/mmBtu from $3.
“U.S. prices could get a lift later this year from yet another hot summer, particularly in Texas, robust industrial growth and strong exports to Mexico. However, strong U.S. production should cap price upside,” Citi said.
European and Asian prices could have more upside from the second quarter as Europe looks to refill storage, and supply risks could also emerge, according to the report. Citi estimates Dutch TTF prices at 36 euros per megawatt hour in 2024, down from the previous 46 euros, and Asian JKM LNG prices at $12.80/mmBtu versus $17.30 previously.
Write to Anthony Harrup at anthony.harrup@wsj.com
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