May 22, 2024 13:34 GMT
Henry Hub Rally Likely Short-Lived: Citi
NATGAS
The rally in US natural gas futures is likely to be short-lived with a possible return to $2.50/MMBtu levels before more clarity appears regarding summer weather, Citi Research said in a note, cited by Dow Jones.
- Citi attributed the recent rally to lower production, rising LNG exports, and recent below-estimate inventory builds.
- Declining medium-term storage projections and short coverings have also been a supportive factor.
- However, production could start returning at the beginning of June, or even earlier, Citi said.
- "We suggest going neutral at current price levels and perhaps going short at the first sign of US production rebounding meaningfully," Dow Jones quoted the Citi analysts as saying.
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