Citi has reduced its medium-term natural gas price forecasts after a recent market selloff and expects additional downward moves as tensions in the Middle East cool. The bank highlighted a significant intraday retreat for European and Asian benchmarks, noting that TTF and JKM fell roughly 15% to 20% from their intraday highs on June 11.
Analysts at Citi attribute the more bearish outlook to a cluster of demand and supply signals across regions. On the demand side, Asian LNG import activity remains subdued, the bank said. Meanwhile, China is contributing stronger-than-expected hydroelectric generation, and water flows across parts of Southeast Asia have increased, all of which reduce immediate pressure on gas balances.
Citi also called out the likely arrival of an El Nino winter pattern as a factor that undermines what had been a more constructive price view for the coming seasons. The bank signaled that this climate pattern presents an additional headwind to forecasts that had previously assumed tighter market conditions.
For U.S. Henry Hub gas, Citi emphasized timing dynamics. While prices have risen recently on the back of summer demand, the bank expects sizable production growth from the Permian and Haynesville basins during the second half of 2026 and through 2027. That increase in output is expected to ease U.S. supply fundamentals over that horizon.
Reflecting these drivers, Citi adjusted its benchmark price paths. The bank lowered its TTF forecast to an average of $12.4 per MMBtu in the second half of 2026 and to $9.2 per MMBtu in 2027. For the JKM Asian spot benchmark, Citi now targets $13.5 per MMBtu in the second half of 2026 and $9.5 per MMBtu in 2027. Its Henry Hub projections were cut to $3.2 per MMBtu in the second half of 2026 and $2.8 per MMBtu in 2027.
Overall, Citi's revised outlook combines softer import demand in Asia, stronger non-gas generation in China, regional hydrological improvements and projected U.S. production growth into a view that anticipates further price weakness across major gas benchmarks.