Natural Gas Comment: Gastech Sentiment Bullish Near-Term LNG Prices

We attended the Gastech conference in Thailand last week and spoke with a broad range of clients, from natural gas producers, to LNG exporters, to importers, to gas distributors and end-users. Differently from our investor clients, the corporate clients we met with overwhelmingly expect the status quo in the Persian Gulf to continue, and see winter TTF and LNG price upside to over 100 EUR/MWh and $35/mmBtu, respectively. This price upside is consistent with our view that, in the absence of any meaningful improvement in Persian Gulf LNG exports this winter, TTF and JKM will likely reach 105 EUR/MWh and $35/mmBtu by the end of the year, assuming average winter weather, well above our 70 EUR/MWh and $24.85/mmBtu base case under a gradually improving Hormuz LNG flow assumption. Clients expect LNG demand destruction mainly in Asia, not Europe, with $28-$30/mmBtu seen as an important JKM threshold for Indian industrial demand destruction;