Global gas prices could plunge ~50% - Citi

Citi strategist Anthony Yuan: "For consumers, summer 2023 looks less volatile, extreme or global than 2021/2022, which should ease commodity-driven inflation. However, for parts of the energy market, particularly global natural gas and coal, the downside volatility remains significant: 30% to 50% downside to prices this summer. Why? European gas storage could be full by late summer. Demand has limited upside amid lackluster global macro, and for gas, power and coal, there’s rising penetration of renewables. Supply is resilient: global oil and US natural gas production is still climbing while remaining flat for global LNG. El Niño, which could start this summer and last multiple years, is the opposite of the just-ended La Niña. This report analyzessummer weather, oil markets after the Saudi cut, the likely downside to gas, coal and power prices, and developments in carbon and biofuels."

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