UBS sees near-term dangers for U.S. pure fuel costs

Investing.com — UBS warned of near-term draw back dangers to U.S. pure fuel costs resulting from milder climate forecasts for February, however raised its value forecasts for the second half of the 12 months on rising liquefied pure fuel exports and tightening inventories.

Colder-than-average winter climate within the U.S. has pushed pure fuel demand to its highest ranges since late 2022, lifting costs. Freeze-offs have disrupted provide, whereas the shutdown of the Freeport LNG export terminal has compounded volatility. UBS now expects pure fuel inventories to finish the withdrawal season in March at 1.7-1.8 trillion cubic toes, barely beneath the five-year common.

Regardless of the potential for value strain within the coming weeks, UBS revised its September and December value forecasts greater by $0.20 per million British thermal models, anticipating a lift from new export terminals, together with Plaquemines and Corpus Christi Stage 3, alongside Mexican LNG amenities. UBS tasks inventories at round 3.7 tcf by the tip of October, down from a previous forecast of three.9 tcf.

Whereas UBS stays constructive on pure fuel costs in the long run, excessive roll prices and near-term dangers are holding the financial institution on the sidelines for now, with no speedy funding suggestions.