Citi lowers natural gas price forecasts on easing Mideast tensions

Investing.com -- Citi has reduced its natural gas price forecasts following a recent selloff and expects further declines as geopolitical tensions in the Middle East ease.

The bank noted that TTF and JKM prices dropped 15% to 20% from their intraday highs on June 11. Citi analysts said they anticipate additional price weakness ahead.

Several factors contributed to the bearish outlook. Asian LNG imports remain weak, while China's hydroelectric generation stays strong. Water flows to Southeast Asia have also increased. The bank added that a likely El Niño winter pattern further challenges the previously constructive price outlook.

For U.S. Henry Hub natural gas, Citi pointed to timing considerations. While prices rose recently due to summer demand, the bank expects strong production from the Permian and Haynesville basins in the second half of 2026 and 2027, which should ease supply fundamentals.

Citi lowered its TTF price forecast to an average of $12.4 per MMBtu in the second half of 2026 and $9.2 per MMBtu in 2027. The bank set its JKM price targets at $13.5 per MMBtu in the second half of 2026 and $9.5 per MMBtu in 2027. For Henry Hub, Citi forecasts $3.2 per MMBtu in the second half of 2026 and $2.8 per MMBtu in 2027.

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