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Prospective Decline in European Gas Prices: Impacts on Various Industries
Investing.com suggests that a notable drop in European gas prices may offer significant advantages for numerous sectors across the continent, as outlined by analysts at Citi.
In a recent client update, the analysts forecast that gas prices in Europe could see a reduction of up to 50% by 2028. This projection is based on the expectation that the shortfall caused by diminished Russian gas supplies will be counterbalanced by a substantial increase in globally available liquefied natural gas.
In the interim, over the next six to twelve months, it is anticipated that natural gas costs in Europe may decrease by approximately 20%, providing a potential boost to various industries.
The analysts identified the chemicals, construction, and industrial sectors as the “largest beneficiaries” of this trend within a five-year horizon. Their analysis highlighted that 30 stocks within the regional index exhibit the strongest five-year correlation with European gas prices, predominantly from the chemicals and industrial sectors.
Furthermore, companies in the automotive and travel industries are expected to gain from these changes, as they have demonstrated heightened sensitivity to fluctuations in gas prices, particularly following the onset of conflict in Ukraine in 2022.
Oil Prices and Market Sentiment
In parallel, oil prices were trending towards a weekly decline as of Friday, influenced by statements from US President Donald Trump advocating for reduced crude prices and an increase in domestic energy production.
At 03:31 ET (08:31 GMT), the West Texas Intermediate (WTI) crude was holding steady at $74.62 a barrel, while the Brent crude contract slipped by 0.1% to $78.22 a barrel.
Both benchmarks experienced a decline of over 3% for the week, marking their most significant drop since November, following Trump’s executive order aimed at promoting US oil production and relaxing several climate regulations affecting the energy sector.
Additionally, during a speech at the World Economic Forum in Davos, Switzerland, Trump urged Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC) to take measures to lower oil prices.
Source
www.investing.com