UBS Trims Gas Price Forecasts Amid Robust U.S. Supply
UBS has lowered its natural gas price forecasts for December 2026, March 2027, and June 2027 by $0.20 per million British thermal units (mmbtu), citing resilient U.S. supply and weaker exports.
The bank's strategist, Giovanni Staunovo, said inventory builds are running well ahead of the seasonal norm, with U.S. natural gas inventories at 3.15 trillion cubic feet, 321 billion cubic feet above the five-year average. This marks a shift from March, when inventories were broadly in line with historical norms.
Staunovo noted that supply growth has outpaced demand growth in recent months, and that inventories could reach the 'high 4 trillion cubic feet range' by October. U.S. dry gas production has held steady at around 110-111 billion cubic feet per day since February, while year-on-year supply growth has slowed from 5.8 billion cubic feet per day (bcfd) in February to 2.8 bcfd in July.
Liquefied natural gas (LNG) exports have also softened, falling from a record 18.5 bcfd in March to 16.6 bcfd in July. Staunovo expects exports to reach a new record high only towards the end of the year, keeping the market better supplied in the meantime.