(Reuters) – Goldman Sachs (NYSE 🙂 retained its $6.80/$5.60 Henry hub and 89/86 EUR/MWh TF Sum22/Win22-22 price forecasts following the Freeport LNG Outage. It noted that the timing of the outage was crucial.

Goldman wrote in a June 8 note that “if the outage at this facility lasts longer than one month its net effect on U.S.gas balances will be mostly offset by strength recently observed in U.S gas demand for power.”

Freeport LNG will be shutting down for 3 weeks after an explosion at the Texas Gulf Coast facility. This is due to concerns about global gas shortages, especially in Europe.

U.S. natural-gas markets dropped on Wednesday as traders predicted that the outage would reduce domestic demand. However, they gained Thursday due to record Texas power demand this week. This was despite a lower-than-usual storage building, higher spot gas prices and low wind power. There has been a decrease in U.S. gas production this month.

We believe it would be more difficult to sustain a 3Q22 TTF market price that is higher than our forecast of 85 EUR/MWh. The research note stated that in that case, it would require TTF to offset the supply loss via destruction by demand.