US NATGAS: Citi Says Trump Tariffs Risks Raising Local Natgas Prices

President Trump’s threat of 25% tariffs on imports from Canada and Mexico could raise US natural gas prices at domestic hubs, but is unlikely to change gas flows significantly, Citi said in a note Jan. 24.

• Canadian natural gas exporters are likely to pass on the impact of the proposed tariffs on downstream customers along the USWC who lack alternative supplies.
• Midwest and Northeast gas markets in the US could potentially turn to supplies from Appalachia or the Rocky Mountains. However, they are more prone to price spikes if another cold wave hits these regions in Feb.
• There will be no change to flows along the US-Mexico border as the US barely imports natural gas from Mexico, Citi said.
• Citi remains optimistic on Q2-Q4 Henry hub prices, given the rapid ramp up of LNG exports and power generation growth.
• UBS sees a risk that natural gas prices could come under pressure in the near term, with milder weather forecast for Feb.