Weather and market conditions contribute to lower price projections

  • Citigroup forecasts U.S. natural gas benchmark futures may fall to $1.80/MMBtu
  • Lower targets tied to milder weather in major markets
  • Citi predicts European TTF numbers may drop to $8/MMBtu range
  • Average U.S. natural gas price projected at $2.30/MMBtu in Q1
  • Citi sees European prices averaging $8.50/MMBtu in current quarter
  • Biden administration’s pause on LNG export terminal approvals expected to have no impact
  • Possible demand lift from hot summer and strong industrial growth
  • Target price puts natural gas near uneconomical production levels in some plays

Citigroup has reduced its price projections for global natural gas prices, with a focus on the U.S. Henry Hub benchmark. The bank predicts that Henry Hub prices may fall as low as $1.80/MMBtu, while European TTF numbers may drop to the $8/MMBtu range. These lower targets are attributed to milder weather than usual in major markets. In the first quarter, the average U.S. natural gas price is expected to be around $2.30/MMBtu, followed by an average of $2.10/MMBtu in the second and third quarters. Despite a possible demand lift from a hot summer and strong industrial growth, Citi believes that strong U.S. production will limit any upside. The Biden administration’s pause on LNG export terminal approvals is not expected to have an impact in the next few years. However, the target price of $1.80/MMBtu could make production uneconomical in some plays. Overall, Citigroup’s forecasts indicate a significant drop in U.S. natural gas prices.

Public Companies: Citigroup (C)
Private Companies: undefined, undefined
Key People: Tom Kloza (Reporter), Jeff Barber (Editor)

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Factuality Level: 8
Justification: The article provides specific price projections for natural gas in different regions and explains the factors influencing those projections, such as weather and production levels. It also mentions the potential impact of the Biden administration’s policies on LNG export terminal approvals. The information is sourced from Citigroup commodity analysts and Oil Price Information Service, which adds credibility to the article. However, it is important to note that the article does not provide a comprehensive analysis of all factors affecting natural gas prices and there may be other variables that could influence the market.

Noise Level: 7
Justification: The article provides information on natural gas prices and projections, but it lacks scientific rigor and intellectual honesty. It does not provide evidence or data to support its claims, and it does not offer actionable insights or solutions. The article also includes irrelevant information about the Biden administration’s pause on LNG export terminal approvals, which is not directly related to the topic of natural gas prices.

Financial Relevance: Yes
Financial Markets Impacted: The article provides information on global natural gas prices, which can impact the energy sector and companies involved in natural gas production, refining, and distribution.

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article discusses the price projections for global natural gas prices, which can have financial implications for the energy sector and related companies. However, there is no mention of any extreme events or their impacts.

Reported publicly: www.marketwatch.com