Investing.com-UBS warned of near-term downside risks to US prices due to milder weather forecasts for February, but raised its price forecasts for the second half of the year on rising liquefied natural gas exports and tightening inventories.
Colder winter weather in the United States has pushed natural gas demand to its highest levels since late 2022, pushing up prices. Freezes have disrupted supply, while the closure of the Freeport LNG export terminal has increased volatility. UBS now expects natural gas inventories to end the March withdrawal season at 1.7-1.8 Tcf, just below the five-year average.
Despite the potential for price pressure in the coming weeks, UBS revised its September and December price forecasts higher by $0.20 per mmBtu, expected on an increase from new export terminals, including Plaquemines and Corpus Christi, along with Mexican LNG facilities. UBS stocks projects at around 3.7 TCF by the end of October, down from a prior forecast of 3.9 TCF.
While UBS remains based on long-term natural gas prices, high spiral costs and near-duration risks are keeping the bank on the sidelines for now, with no immediate investment recommendations.
