By Investing.com – A potential fall in European gas prices could provide a tailwind to a number of industries in the region, according to analysts at Citi.
In a note to clients, the analysts predicted that gas prices in Europe could halve through 2028, as a loss of Russian supplies is offset by a global increase in liquefied natural gas on hand.
Over the next six to twelve months, European natural gas costs may also decline by roughly 20%, the analysts estimated.
The chemicals, construction, and industrials segments are seen as the “biggest beneficiaries” over a five year period, the analysts said. In their screening of stocks in the regional Stoxx 600 index, 30 of the stocks with the highest five-year correlation to European gas prices come from the chemicals and industrials industries in particular, they noted.
Car manufacturers and travel groups also stand to be bolstered, they said, arguing that these businesses were especially sensitive to volatility in gas prices following the outbreak of hostilities in Ukraine in 2022.
Oil prices remained on track for a weekly loss on Friday, with sentiment dampened by US President Donald Trump’s calls for lower crude prices and higher energy production in the US.
By 03:31 ET (08:31 GMT), the West Texas Intermediate crude futures (WTI) were mostly unchanged to $74.62 a barrel, while the Brent contract fell 0.1% to $78.22 a barrel.
Both benchmarks were trading more than 3% lower for the week — their worst performance since November — after Trump signed an executive order calling for increased US oil production, while also scaling back certain climate-related restrictions on the energy sector.
Additionally, Trump, during a speech on Thursday at the World Economic Forum in Davos, Switzerland, said Saudi Arabia and the Organization of the Petroleum Exporting Countries should bring down oil prices.