JPMorgan_Econ_FI-US_Natural_Gas_So_much_noise...-114578454_15页_1mb

US Natural Gas Price Forecast Update

• Key Revisions:

  • Revised 2025 price forecast to $3.80/MMBtu, an increase of $0.30 from previous estimates, due to tighter supply-demand balance.
  • 2026 price forecast raised to $3.31/MMBtu, reflecting adjustments from higher Plaquemines LNG capacity and expected production growth.

• Demand-Side Dynamics for Summer 2025:

  • Plaquemines LNG facility feedgas flows averaging 2.5 Bcf/day, supporting the price hike.
  • Reduced natural gas power burn due to stronger coal and renewable generation, lowering summer power demand.
  • Gas-to-coal switching at 1.1 Bcf/day, but sensitivity to higher prices could reverse this.

• Supply-Side Constraints:

  • Limited production growth for summer 2025 project at 4 Bcf/day, driven by regional variations (e.g., Permian production increase).
  • Rig count data indicates delayed production ramp-up until 2026, exacerbating supply insecurity.

• Risk Factors:

  • Potential recess
  • Tariffs may increase recession probability to 60%, impacting industrial demand and global LNG needs.
  • End-October storage trajectory is key; a retreat could signal price corrections due to reduced demand.
  • Recession risks and global demand shifts could affect both 2025 and 2026 prices if not mitigated.