Investing.com – UBS analysts suggest global gas prices are set to rise, driven by tightening supply and demand fundamentals, according to a research note on Monday.
Analysts have raised their gas price forecasts for Europe and Asia by around 9% on average for 2024, marking €33/MWh for TTF and $12/mmBtu for JKM, respectively.
⚠️ THE INVESTINGPRO SUMMER SALES HAVE STARTED! Combine the sales and the discount reserved for our readers for a total discount of -43%* on the one-year subscription! Take advantage of cutting-edge tools and AI-managed stock market strategies for less than 7 euros per month!⚠️
Despite a tentative recovery in global LNG demand, supply uncertainties have tightened market fundamentals. Unplanned outages in Australia and Norway, as well as a reduction in US production on the , have raised supply concerns ahead of the cooling season.
This situation has led to an increase in prices, which are in the average range of 30 euros/12 dollars. At the same time, global LNG imports have remained stable year-on-year.
Looking ahead, UBS forecasts that growth in global LNG imports will remain below the pre-crisis five-year average of 7%, increasing by only 1% in 2024 and 5% in 2025.
This reduction in forecast figures is attributed to a fragile market balance due to limited spare capacity, which could lead to price volatility.
However, an improvement is expected from 2026 onwards, when new LNG capacity will start to ease market tensions. Despite some project delays, a wave of new capacity is expected to come online by 2026, which should start to ease market tensions.
UBS maintains its global LNG demand forecast for 2026-2030, with declining European LNG needs offset by increasing Asian imports.
The research note also highlights the impact of recent supply disruptions. UBS expects near-term prices to trade in a tight range around €30/11 before rising towards €40/10 in Q4 2024 with higher seasonal demand.
