19-06-08 Voracious demand in South Korea and Spain will keep liquefied natural gas deliveries in the US low, which will be bullish to US gas prices, analysts at US investment bank Goldman Sachs said.
Analysts Samantha Dart and Jeffery Currie expect Henry Hub prices to average $ 12.80/mm Btu over the summer and peak at $ 13.80/mm Btu this coming Northern Hemisphere winter -- before falling back to $ 10/mm Btu in June 2009 -- as Asian and European pulls US prices up.

"The higher-than-expected increase in LNG demand from Asia and Europe in the first quarter of 2008 was met by higher-than-expected LNG supplies in the market, likely motivated by high spot LNG prices in the period, and lower-than-expected North American LNG imports," Dart said.
"Both Mexico and the United States showed declines in LNG imports earlier this year relative to our expectations."

The increased international demand for gas will, Goldman said, bolster US prices as US LNG deliveries will no longer take up the slack for US demand, which the analysts still see as increasing even as the US economy slows.
"Going forward, we believe this will still be the case, as the drivers underlying the stronger-than-expected global demand for natural gas, such as the vulnerability of non-OECD Asia's power infrastructure and rapidly increasing oil prices, will continue in the medium term," Goldman said.