Global Gas and Power Insights: Henry Hub price premium through 2027, especially Jan‘27, to erode

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Global Gas and Power Insights: Henry Hub price premium through 2027, especially Jan‘27, to erode

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14 Jul 2026 01:50:20 ET │ 30 pages

Global Gas and Power Insights

Henry Hub price premium through 2027, especially Jan’27, to erode

CITI'S TAKE

Maggie Xueting Lin AC

US Henry Hub prices are more likely to fall in the weeks to come. This report +852-2501-2796

conducts an extensive analysis on price levels, cash price behavior and, in maggie.x.lin@citi.com

particular, the Dec-Jan and Jan-Feb price spreads. Key drivers include: peak

summer demand is in view, new Permian pipelines are about to come online Anthony Yuen AC

unleashing stranded gas there, and the winter outlook amid a strong El Nino +852-2501-2731

gets more attention. Last Thursday’s larger than expected storage build, anthony.yuen@citi.com

possibly a sign of looser fundamentals, catalyzed an initial price drop. We

estimate that Jan’27 prices look to have among the most premium that can Xiaodan Zhu AC

be eroded. Hence, we maintain that Henry Hub prices should average +1-212-816-5109

$2.8/MMBtu in 2027 (vs. futures at $3.3/MMBtu) and $3.2/MMBtu in 1Q27 xiaodan.zhu@citi.com

(vs. futures at $3.7/MMBtu).

Maximilian J Layton

High projected gas storage levels—assuming winter weather in line with the five- +44-20-7986-4556

year average—would weigh on both spot and winter futures prices. A likely max.layton@citi.com

milder-than-normal winter due to El Niño would create additional downside Kenny Xunyuan Hu, CFA

pressure on futures. We project storage at 2,556 Bcf in January 2027, approximately

+65-6657-38737% (159 Bcf) above the five-year average, and at 2,107 Bcf in March 2027, roughly

15% (273 Bcf) above the five-year average. A projected “super” El Niño would likely kenny.x.hu@citi.com