Headline: Cold Snap Lifts US Natural Gas; AI Data Centers and LNG Buildout Point to Stronger Demand
Introduction: US natural gas prices climbed to some of their highest levels since the 2023 surge as colder forecasts tightened the near‑term outlook. Beyond winter weather, structural demand drivers—from AI-powered data centers to an accelerating LNG export wave—are reshaping the North American gas market and could support prices into the next decade.
A brisk 5% rally underscores how sensitive gas futures remain to heating demand. Yet the market’s deeper story is the power-hungry AI boom. By 2030, roughly 500 large data centers could require 50–60 GW of electricity—comparable to nearly 20 million US homes—with much of the incremental load met by gas-fired generation in many regions. That scale of consumption could add about 3.5–4% to US natural gas demand, with further growth likely into 2035 as computing capacity expands and grid reliability priorities favor dispatchable power.
Export capacity is poised to climb as well. Seven major LNG projects under construction across North America are set to add around 18 Bcf/d, taking total export capability to roughly 28.7 Bcf/d by 2029. Additional expansions—such as potential approvals for LNG Canada Phase 2 and Lake Charles—could contribute another ~4 Bcf/d, reinforcing the link between US prices and global gas markets. On the supply side, softer oil prices and leaner 2026 drilling budgets may reduce associated gas output, creating a marginal drag on supply growth. In this backdrop, a move back toward $7/MMBtu would boost producers and contract drillers, while also raising energy costs and inflation risks for consumers and industry.
Key Points: – US natural gas prices rose on colder weather, reaching some of the strongest levels since 2023. – AI-driven data centers could require 50–60 GW of power by 2030, adding roughly 3.5–4% to US gas demand. – Seven North American LNG projects under construction aim to add ~18 Bcf/d, lifting export capacity to about 28.7 Bcf/d by 2029. – Potential approvals for LNG Canada Phase 2 and Lake Charles could add ~4 Bcf/d more. – Lower oil prices and leaner 2026 budgets may slow oil-directed drilling, curbing associated gas supply. – A price move toward $7/MMBtu would aid producers but increase energy and inflation pressures.
