Analysts at Goldman Sachs said to clients in a note this week that the firm sees limited upside to Henry Hub prices until 2025. The firm expects production to rebound in June, but to settle at a lower level than previously expected. This has led Goldman to upwardly revised their BalSum24 Henry Hub forecast to $2.65/mmBtu (from $2.15/mmBtu) and forwards to $2.88mmBtu.

The revised forecast comes even as production has continued to decline, remaining below 99Bcf/d over the past few weeks. Goldman has revised its production forecast by 0.5Bcf/d to 100.6Bcf/d for the rest of the summer.

Despite the revised forecast for gas prices, Goldman believes upside is limited. “In our view, a sustained increase in prices would lead to (1) a decrease in gas burns from coal-to-gas switching and (2) an unwind in production shut-ins, preventing physical tightening in the market and keeping storage on an elevated path, which could once again increase congestion risks,” wrote the analysts in the note.

Prices are expected to rise meaningfully only once winter begins as a result of increasing feedgas demand from new LNG projects. “This view is reinforced by the additional support to demand we now see following changes to our gas burn model to incorporate higher power load from growth in data centers and electrification,” said the analysts.

Accordingly, Goldman continues to remain bullish Sum25 Henry Hub at $4/mmBtu versus forwards at $3.37/mmBtu. They recommend going long Jun25 Henry Hub.