UBS has warned of short-term downside risks for U.S. natural gas prices due to milder February weather forecasts. However, the bank raised its second-half price forecasts, citing increased liquefied natural gas (LNG) exports and tighter inventories.
Colder-than-average winter conditions have pushed natural gas demand to its highest levels since late 2022, driving up prices. Freeze-offs disrupted supply, while the ongoing Freeport LNG export terminal shutdown has added to market volatility. UBS estimates natural gas inventories will finish the withdrawal season in March at 1.7–1.8 trillion cubic feet, slightly below the five-year average.
Despite near-term pressure, UBS increased its September and December price forecasts by $0.20 per million British thermal units, expecting new export terminals, such as Plaquemines and Corpus Christi Stage 3, along with Mexican LNG facilities, to support prices. The bank now projects inventories at 3.7 trillion cubic feet by October’s end, revised down from a prior estimate of 3.9 tcf.
While UBS maintains a positive long-term outlook for natural gas prices, it remains cautious due to high roll costs and immediate market risks. The bank has no active investment recommendations for now.
By balancing immediate challenges with promising export-driven growth, UBS’s revised outlook reflects cautious optimism for the natural gas market in 2025.


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