The Era of Cheap U.S. Natural Gas May Be Coming to an End

Context

U.S. natural gas prices are set to rise through 2035, following a decade of low Henry Hub prices, as the AI data center boom and the expansion of U.S. LNG export infrastructure will underpin strong demand, analysts at Wood Mackenzie say.  During the decade to 2025, the benchmark U.S. Henry Hub prices remained in a narrow range of between $2 per million British thermal units (MMBtu) $4 per MMBtu, thanks to the surge in U.S. gas production as operators invested in standalone gas plays and boosted associated gas production from oil plays. Well…

What it means

A structural shift toward higher U.S. natural gas prices through 2035 has historically been associated with improved margins for domestic gas producers and LNG exporters, while sectors that depend on cheap gas as an input — including utilities, chemicals, and fertilizers — may face cost headwinds. This is a medium-to-long-term structural trend rather than an immediate supply shock, so the market impact is expected to build gradually rather than arrive in a single session.

Causal chain

• Exp. moveTimeframeConviction
• ↑Natural gas producers (EQT, AR, CNX)$52.71M21d

  Rising Henry Hub prices directly increase revenue and margins for U.S. natural gas producers

• ↑LNG/Midstream (LNG, TELL, ET)$258.06M21d

  LNG export infrastructure expansion benefits midstream and LNG-focused operators as throughput and tolling revenue grow

• ↓Utilities (XLU)$44.66S21d

  Higher domestic natural gas prices raise input costs for gas-intensive power consumers, including AI data center operators and utilities

• ↓Chemicals/Fertilizers (CF, MOS, LYB)$125.77S21d

  Structurally higher U.S. gas prices reduce the cost advantage of U.S. chemical and fertilizer producers who rely on cheap feedstock gas

Not investment advice · for informational purposes only. Generated 5 Jul, 19:02 UTC