Natural Gas Price Forecast 2023 — Is Natural Gas a Good Investment?

 

The price of natural gas in Europe has returned to its pre-Russian invasion of Ukraine levels as a result of falling demand and an oversupply. Natural gas prices have dropped in both the United States and Asia.

 

Also falling from $9 in September to around $2.5/MMBtu is the price of natural gas futures on the New York Mercantile Exchange’s (NYMEX) Henry Hub market for the coming month. From its all-time peak in late August 2022, the price of European gas futures has declined by more than 80%, while the price of Asian gas futures has fallen by more than 60%.

 

After China abolished the Covid-19 ban in its entirety, has the recovery in gas demand caused prices for natural gas to rise again? Supply and demand, climate, and the availability of substitute supplies all have a role in the ups and downs of natural gas pricing. Natural gas (NGAS) has a large trading volume, a wide bid-ask gap, and a high volatility, making it a desirable asset to invest in.

 

Read our newest Natural Gas forecast and price predictions for 2023 and beyond, and keep up with the current market price for Natural Gas with our interactive chart. You can gain additional insight to assist you make educated trading decisions by paying attention to key pivot points and support and resistance levels.

 

 

Natural Gas Price History

 

 

The United States has ramped increased its production of natural gas since the 1930s in order to fulfil the needs of a growing population. Natural gas output peaked in 1975, but the commodity’s market price didn’t begin to rise until after production began to slow.

 

By 1975, about half of all marketing petrol in the United States was sold inside the same state, leading to shortages in the Midwest that briefly shut down industries and schools in 1976 and 1977.

 

These declines in supply have been the trend for recently predicted natural gas prices, with supply interruptions driving price hikes since 1990. This has historically contributed to price increases; but, in the modern age, petrol prices have been declining, in part due to advances in technology and increased supply.

 

These estimates of recoverable reserves have climbed to many hundreds of trillion cubic feet with to modern technologies like hydraulic fracturing and horizontal drilling, so there is less worry of running out. The spot price of natural gas has dropped significantly since 2008, and hydraulic fracking is largely to blame.

 

Natural gas is priced according to supply and demand because it is a fossil fuel with an infinite supply. From 2000 to 2009, there were several supply outages and fears of running out, but thanks to advances in mining technology, shale gas has arisen to put those worries to rest for the next century.

 

 

 

 

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Natural Gas Price Forecast 2023

 

 

The events of January have altered the STEO forecast for the month of February. The average price of natural gas at Henry Hub is projected by EIA to reach $3.40/MMBtu by 2023 and to remain at roughly $4.00/MMBtu through the end of the year. The EPA forecasted in January’s STEO that Henry Hub prices would average $5.00/MMBtu in 2023.

 

Fitch Ratings predicted that by the end of 2022, the average price of natural gas at Henry Hub would fall to $5 per 1,000 cubic feet (Mcf) from $6.75. According to the company’s natural gas price projection for 2025, the price of gas in the United States was predicted to decrease to $3. For the next five years, experts at Henry Hub expect natural gas prices to average $2.75/Mcf.

 

Fitch Ratings revised down their 2023 projection for European natural gas prices from $45 to $40/Mcf. This prediction pertains to Dutch TTF. From a high of $20 Mcf in 2024, prices were predicted to drop to $10/Mcf in 2025 before levelling off at $5/Mcf in 2026 and beyond.

 

According to a report published by trade Economics on 5 January 2023, the price of natural gas in Europe is expected to rise from its current trade level of €84.61/MWh to €115.31 by the end of the first quarter of 2023.

 

A natural gas projection released by ANZ Research in the middle of December predicted an average LNG spot price of $32/MMBtu in 2023, down from $36.8/MMBtu in 2022. Super-cooled natural gas was predicted to cost $23.5 per MMBtu in 2024, a decrease of 26.5 percent over 2023 prices.

 

In October 2022, the World Bank predicted that decreased demand from families and enterprises would cause natural gas prices in the United States to average $6.20/MMBtu in 2023. It predicted that by 2023, the price of petrol in Europe would average $32. The bank estimated that the average price of LNG in 2023 will be $17/MMBtu, down from $18.40 in 2022.

 

Prediction service based on an algorithm Wallet Investor predicted a significant increase in the price of natural gas in 2023 and called it an excellent investment for the long run. In December of 2023, the service predicted that the market price of natural gas will be $5.570/MMBtu.

 

Natural Gas Price Forecast  2030-2050

 

While analysts rarely provide predictions for natural gas prices more than a year ahead, services that use algorithms to estimate future prices can. Let’s forecast natural gas prices for the future.

 

In a long-term natural gas price estimate published on 5 December, Fitch Rating predicted that Henry Hub would average $2.75 per 1,000 cubic feet (Mcf) in 2026 and beyond, down from $3/MMBtu and $10/MMBtu in 2025, respectively, and that Dutch TTF would average $5.0/Mcf. No estimates for 2030 petrol prices were provided by the company.

 

Deloitte predicted in September that by 2030, natural gas would be priced around $5.40/Mcf at Henry Hub, down from $8.50/Mcf in 2022. The company predicted that by 2040, the price of natural gas in the United States would have increased to $6.55/Mcf.

 

Henry Hub was projected to average $6.70/MMBtu in 2041. Deloitte did not predict the price of natural gas in 2050, but it did predict that prices at Henry Hub would climb by 2% annually beginning in 2041.

 

For this reason, most analysts are extremely hesitant to make long-term natural gas price predictions.

 

If you’re trying to estimate the future of gas prices or evaluate the long-term outlook for natural gas pricing, keep in mind that analysts’ predictions are prone to error. Analysts base their forecasts on fundamental and technical analyses of the asset’s performance, but there is no assurance that these analyses will be accurate.

 

Always conduct your own homework, and keep in mind that your decision to trade will be influenced by your comfort level with risk, your familiarity with the market, the diversity of your investment portfolio, and the amount you can afford to lose. When investing, never risk more than you can comfortably lose.

 

 

 

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Is Natural Gas a Good Investment?

 

 

Natural gas has promising prospects as both a resource and a commodity. Greater quantities of this fuel are being used because they are more environmentally friendly and more long-lasting than their fossil fuel counterparts.

 

The growth of shale fuel, for example, has bolstered supply and dulled demand, lowering the price of natural gas, but it has also made the fuel more accessible and usable for new industries. This is in response to a predicted demand for the fuel.

 

Natural gas prices are expected to rise by three percent year, and this might skyrocket when traditional fossil fuels become obsolete. The current cheap price of natural gas indicates that a dramatic rally may occur this year, making it an excellent moment to make a long-term investment.

 

 

FAQs

 

 

1.In 2023, will Natural Gas prices decrease or increase?

The dearth of momentum in gas drilling and production is a result of the uncertainty surrounding future prices. Regional elements influencing weather and storage levels continue to have a substantial impact on petrol prices. In 2023, the EIA anticipates that above-average storage inventories will reduce natural gas prices. In 2023, experts anticipate that Henry Hub prices will average approximately $3.40/MMBtu.

 

2.Will the price of natural gas rise over the next five years?

Rating agencies such as EIA continue to anticipate price moderation due to slower economic growth, which will reduce demand in the short term and contribute to further price declines as geopolitical tensions ease in the long term.

 

3.What are the projected prices for natural gas in 2030?

In September, Deloitte projected that Henry Hub would trade for $5.40/Mcf in 2030, down from $8.50/Mcf in 2022.