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Amidst shifting production dynamics and market trends, Goldman Sachs analysts have revised their forecasts for natural gas prices, projecting limited upside unt

Goldman Sachs Adjusts Natural Gas Price Forecasts Amidst Production Shifts

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Amidst shifting production dynamics and market trends, Goldman Sachs analysts have revised their forecasts for natural gas prices, projecting limited upside until 2025. The firm anticipates a rebound in production starting in June but expects it to settle at a lower level than previously anticipated.

Goldman Sachs has upwardly revised their BalSum24 Henry Hub forecast to $2.65/mmBtu (from $2.15/mmBtu) and forwards to $2.88/mmBtu. This adjustment reflects ongoing declines in production, which have remained below 99Bcf/d in recent weeks. The firm has revised its production forecast to 100.6Bcf/d for the rest of the summer, a decrease of 0.5Bcf/d.

Despite these revisions, Goldman Sachs sees limited upside for gas prices in the near term. They argue that sustained price increases could lead to reduced coal-to-gas switching and an unwinding of production shut-ins, preventing significant tightening in the market and keeping storage levels elevated, which could increase congestion risks.

The analysts suggest that meaningful price increases are more likely to occur once winter begins, driven by rising feedgas demand from new LNG projects. They also highlight additional demand support from growth in data centers and electrification.

As a result, Goldman Sachs remains bullish on Sum25 Henry Hub, forecasting it at $4/mmBtu compared to forwards at $3.37/mmBtu. They recommend taking a long position on Jun25 Henry Hub.

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