US natural gas prices could find a fundamental floor in 2027 before entering a multi-year structural bull market driven by surging LNG exports, power demand and industrial consumption, TPH Energy Research strategists said in a Tuesday note.
TPH Energy analysts said near-term fundamentals remain challenging, with the latest supply and demand model still pointing to US gas storage ending 2027 at close to 4.1 trillion cubic feet, a level that would weigh on prices if production remains resilient.
However, TPH said falling forward prices are likely to force producers, particularly in the Haynesville shale, to curb drilling activity, reducing supply growth and tightening the market.
Matt Portillo, an analyst at TPH, said the bank's base case for 2027 remains $3.50 per million British thermal units, but prices may need to approach $3-$3.25/MMBtu to slow production growth in gas-focused basins.
The forward curve is now approaching these levels, which TPH considers a catalyst for activity to drop out of basins like the Haynesville, Portillo said.
TPH said it has yet to make a significant cut to its 2027 supply forecast, leaving room for a more constructive outlook should producers respond to weaker prices.
TPH currently forecasts production growth next year led by the Permian Basin, followed by the Haynesville, Eagle Ford and Anadarko basins.
Meanwhile, TPH revised its LNG outlook, delaying the expected ramp-up of Golden Pass LNG while bringing forward production growth from Rio Grande LNG and Venture Global's (VG) CP2 project.
Though renewable power additions are expected to temper growth in gas-fired generation over the next two years, the bank said electricity generation demand is likely to exceed its current long-term forecast of an additional 6 billion cubic feet per day through 2030.
From 2028 onward, the balance is projected to shift decisively toward higher prices as new LNG export capacity comes online and domestic demand strengthens.
TPH forecasts US storage will fall to around 3.5 Tcf by the end of the 2028 injection season as LNG exports from projects including Port Arthur LNG, CP2, Golden Pass and Rio Grande accelerate, alongside rising industrial demand, exports to Mexico and stronger gas-fired power generation.
The brokerage expects Henry Hub prices to average about $4/MMBtu in 2028.
TPH expects the full ramp-up of Gulf Coast LNG projects by 2029 and continued growth in industrial and power demand across Texas, Louisiana, and Arizona to tighten regional supply sufficiently to require demand destruction.
The bank forecasts Henry Hub prices rising to about $4.50/MMBtu, with October 2029 storage falling to about 2.1 Tcf.
Regional pricing dynamics are also projected to strengthen around the Gulf Coast, where hubs such as Gillis could emerge as the strongest basis market in the US because of limited supply relative to growing demand.
TPH said the US Northeast is an increasingly attractive long-term market, citing industry discussions indicating regional gas demand could increase by 6-8 Bcf/d over the next five years, largely driven by data center-related power generation.
Combined with proposed pipeline expansions that could add another 2-3 Bcf/d of takeaway capacity, the bank said demand growth could outpace supply increases, tightening regional basis differentials and increasing the value of long-term gas supply contracts.
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