11:55 AM EDT, 09/25/2024 (MT Newswires) -- Kinder Morgan ( KMI ) faces near-term headwinds due to low natural gas prices and expected lower crude oil prices over the next several quarters, RBC Capital Markets said in a note emailed Wednesday.

However, in the long term, the company is well placed to benefit from increasing demand for power and natural gas, RBC said in the note ahead of Kinder Morgan's ( KMI ) Q3 results in October.

The investment firm said commodity prices represent the "biggest near-term headwinds" for the company.

"Henry Hub natural gas price is averaging ~$2.04/MMBtu [year to date] vs KMI's budgeted $3.50/Dth and ~$2.05/MMBtu 3QTD, which has led to lower dry gas production that we believe will affect [Kinder Morgan's ( KMI )] gathering volumes," RBC said.

The West Texas Intermediate, or WTI, crude oil price has averaged about $79 per barrel year to date compared with Kinder Morgan's ( KMI ) budgeted $82 a barrel, RBC said.

However, the company is "opportunity rich in the long-term," the note said, adding "natural gas demand should grow on the heels of LNG capacity expansions and power demand growth, and we believe [Kinder Morgan's ( KMI )] asset base is well positioned to benefit," the note said.

RBC maintained its $22 price target on Kinder Morgan's ( KMI ) stock, with a sector perform rating.

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