Spanish natural gas utility Naturgy expects natural gas prices in the U.S. and the UK to rise in the second half of the year, while spot prices in Asia should contract further, Kallanish Energy reports.
Under its outlook for the July-December period, the company forecast Henry Hub prices to improve 5.26% to $2 per million British thermal units (MmBtu), from the $1.9/MmBtu average in 1H20.
National Balancing Point (NBP) gas futures in the UK are expected to increase 12.5% in H2 to $2.7/MmBtu, from $2.4/MmBtu in the first-quarter, Naturgy said in its earnings presentation.
However, spot gas prices in Asia will not recover later this year. Instead, the Spanish firm forecasts a decline of 23.7% to $2.9/MmBtu, from $3.8/MmBtu in H1.
NBP gas prices dropped 54% from $5.2/MmBtu in 1H19, while Henry hub prices declined 35% from $3/MmBtu. The Asian JKM benchmark shrunk 46% from $7/MmBtu in 1H19 to $3.8/MmBtu in 1H20.
Naturgy started de-risking its business portfolio by renegotiating its gas procurement contracts. The move is set to result in a “better alignment of the contracts with the prevailing market conditions,” it said.
This post appeared first on Kallanish Energy News.