Citi Isn’t Ruling Out Natural Gas at $100 in a Frigid Winter
- Bank more than doubles Asian, European LNG forecasts for 4Q
- Ripple effect into other fuels stronger than initially thought
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Citigroup Inc. more than doubled its Asian and European natural gas forecasts for next quarter and said prices could surge to as high as $100 per million British thermal units in the event of a particularly cold winter.
Liquefied natural gas prices are skyrocketing as seasonally low European inventories, booming Chinese demand and supply constraints from Russia to Nigeria lead to a bidding war for the power generation feedstock before the northern hemisphere winter. Japan-Korea marker prices have jumped almost 50% so far this month to near $30 per mmBtu, while in Europe LNG is up around 40% to close to $25. Price gains in the U.S. have been more subdued.