The spread between the U.S. Henry Hub natural gas price and the United Kingdom’s (UK) benchmark NBP gas price marker has widened in 2010 compared to 2009 and the futures market forward prices show that spread could more than double in 2011. But Barclays Capital believes that the upward projections for the UK market are overblown and will correct. The investment bank is predicting a $1.52/MMBtu spread for 2011, not far off this year’s spread so far.
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Barclays Sees Moderate 2011 HH-NBP Basis Spread
The spread between the U.S. Henry Hub natural gas price and the United Kingdom’s (UK) benchmark NBP gas price marker has widened in 2010 compared to 2009 and the futures market forward prices show that spread could more than double in 2011. But Barclays Capital believes that the upward projections for the UK market are overblown and will correct. The investment bank is predicting a $1.52/MMBtu spread for 2011, not far off this year’s spread.
October 7, 2010
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