Natural gas prices are projected to close the year negatively, despite being down 10% year-to-date, largely due to milder winter conditions and a supply surplus. However, industry experts are optimistic about a rebound by 2025, fueled mainly by increased exports and rising demand from artificial intelligence-driven facilities. This positive outlook was highlighted by Francisco Blanch, head of Bank of America’s global commodities and derivatives research, during a recent energy outlook roundtable.

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One key driver for this optimism is the expected growth in power demand for data centers, which, according to analysts, will rise by 10% to 15% annually up to 2030. Natural gas is set to play a pivotal role as a reliable energy source to support this demand, with projections indicating it could account for up to 5% of the total global power demand by 2030. Dennis Kissler from BOK Financial supports this view, suggesting that natural gas is poised to become the ‘fuel of the future.’

Furthermore, deregulatory measures anticipated under the new Trump administration could eliminate regulatory hurdles affecting liquefied natural gas (LNG) export permits and pipeline projects, thereby enhancing industry profitability. According to IndexBox data, notable market players such as the Williams Companies and Oneok have already seen stock price increases of over 40% this year.

Looking ahead, the U.S. LNG exports are projected to rise by 15% next year, aligning with Europe’s efforts to diversify and increase its LNG infrastructure to minimize reliance on Russia. SP Global Commodity Insights projects that natural gas prices at Henry Hub will surpass $4.00 per million metric British thermal units (MMBtu) by 2025, thanks primarily to this surge in export demand.

However, some analysts, including those from Goldman Sachs, express caution. They predict potential delays in policy changes and LNG supply developments might postpone the expected price hike until 2026 instead of the latter part of 2025.

Source: IndexBox Market Intelligence Platform