From Bloomberg via Advisor Perspectives, October 8:
Morgan Stanley raised its price estimates for liquefied natural gas in 2023 and 2024, seeing Europe’s soaring demand for the fuel intensifying global competition for supplies.
The continent looks set to cope this winter even as Russia cut gas exports to the minimum, but next year the supply crunch really could bite. Europe will need even more LNG to replace Russian volumes next summer when the continent will be refilling storage, while China’s demand will recover from lockdowns to offset lower imports from other Asian buyers. And supplies are lagging behind.
“We see a rising deficit next year,” Morgan Stanley analysts including Martijn Rats said in a note. “We see the need for prices to remain elevated for longer to continue constraining demand.”
The bank now sees Asian LNG prices averaging $39.50 per million British thermal units next year, up by almost a third from $30 before. The 2024 price forecast was raised by 57% to $34.50. Nearer-term forecasts were left unchanged....
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