According to analysts at Citigroup, global gas prices may experience a significant decline of up to 50% compared to the previous year. This downward trend is attributed to weak demand and the persistent supply of gas in European and Asian markets. The note issued by Citigroup highlights the resilience of the supply, with oil and natural gas production continuing to rise globally while remaining stable for liquefied natural gas (LNG).
While oil prices are expected to remain within a certain range, estimated between $72 and $90 per barrel, the analysts anticipate greater downside potential for global natural gas and coal prices. The Citi note provides price projections for the third quarter, suggesting that gas prices at the U.S. Henry Hub will average around $2.20 per million metric British thermal units. Similarly, prices on the Dutch exchange TTF are expected to reach $3.80, while the JKM marker for Japan and Korea is projected at $4.80.
These figures represent a considerable decline, approximately 50%, compared to current forward prices for TTF and JKM. This would align them with the already diminished Henry Hub prices, which have already experienced a nearly 50% decrease over the course of the year.
