Global X U.S. Natural Gas ETF(LNGX.US)

How to play the surge in natural gas prices

Natural gas prices have surged, experiencing their best day in four years due to an arctic blast affecting much of the U.S. Prices rose 25% to $3.89 per million British thermal units, with further increases expected. This spike is attributed to extreme cold weather and structural factors, including the U.S. becoming the largest LNG exporter. Eric Fry predicts sustained higher prices driven by increased demand from AI data centers. Additionally, President Trump's announcement regarding a framework deal with NATO has positively impacted stock markets, alleviating previous geopolitical concerns.

US refineries brace for disruptions as Arctic blast hits

U.S. refineries are bracing for disruptions due to an unexpected Arctic blast, with temperatures expected to drop below freezing across much of the country. This cold front could lead to equipment malfunctions and a reduction in refining capacity, potentially curtailing about 7 million barrels of crude oil production. Refineries like Citgo and HF Sinclair are already implementing precautionary measures. U.S. diesel futures surged by 4% as natural gas prices hit a six-week high, driven by increased heating demand amid the cold weather.

Natural Gas Prices Notch Best 2-Day Surge On Record Ahead Of Coldest Weather In A Nearly Century

Natural gas prices surged nearly 54% over two days, marking the strongest two-day and weekly increase on record, driven by forecasts of extreme cold weather in the U.S. EQT Corp and other gas production stocks also saw significant gains. The severe Arctic blast is expected to disrupt natural gas production and pipeline flows, with potential record withdrawals from storage anticipated. The U.S. Energy Information Administration will release its storage report soon, with expectations of a substantial withdrawal.

Natural gas is trading higher due to forecasts of a wide-ranging winter storm. The arctic blast may threaten prolonged heating demand, and freeze-offs could diminish surplus inventories.

Global LNG Supply Surge Threatens Near-Term Price Slump

A surge in global LNG supply, driven by new export projects and ramp-ups, is expected to lead to a 10% increase in supply this year, resulting in lower Asian spot LNG prices and European benchmark gas prices. While this may reduce profit margins for U.S. exporters, it could stimulate demand, particularly in price-sensitive Asian markets. The U.S. LNG exports are projected to grow significantly through 2027, with major projects ramping up. Despite concerns of a near-term glut, top exporters like Qatar and the UAE anticipate strong future demand but warn of insufficient investment in supply.