Goldman Sachs raises US gas price forecast amid colder winter

Goldman Sachs raised its forecast of U.S. Natural Gas prices from $3.00 per million British Thermal Units (MMBtu), to $3.60 for 2025. This is due to tighter gas balances in this winter, as a result of colder than average temperatures.

The bank stated that "there is no need for $4 gasoline just yet".

The investment bank stated in a note that it expects a more moderate downward revision of our storage expectations for end-October 2025, which is -124 BCF (to 3,980Bcf).

The bank stated that this suggests new drilling in the Haynesville Shale, a major region for gas production, is not required at this time.

Last week, an unusual winter storm brought heavy snow, ice and wind gusts across the U.S. Gulf Coast, in a region that is not used to flurries. Meanwhile, much of the United States was still frozen.

Analysts predicted that energy companies would have pulled 317 billion cubic foot (bcf), or the equivalent of a record amount of gas, from storage in the week ending Jan. 24, to meet a record demand for gas during icy weather last week.

If the figures are correct, this would be only the fourth time that utilities have withdrawn more than 300 bcf from storage within a single week. However, it would still fall short of a record 359 bcf which was withdrawn in January 2018 during a freeze-free week.

Goldman Sachs stated that the colder temperatures than expected in recent weeks have amplified the risks of tightening gas balances.

Goldman Sachs predicts that increasing U.S. exports of LNG will tighten the gas balances in 2026. This will require additional drilling to ensure adequate winter storage.

The bank increased its forecast for 2026 gas prices to $4.15/MMBtu, up from $4.00.

On Monday, U.S. Natural Gas futures dropped about 8% and reached a new two-week low. (Reporting from Rahul Paswan, Bengaluru. Editing by Rashmi aich)

(source: Reuters)