How AI energy demand in 2025 will put natural gas in the spotlight

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How AI energy demand in 2025 will put natural gas in the spotlight

Natural gas (NG=F) prices are on track to close out the year in negative territory. But there’s optimism for 2025, largely because of exports overseas and more demand stemming from artificial intelligence.

“We’re constructive on power, and because we’re constructive on power, we think natural gas is going to perform well,” said Francisco Blanch, head of Bank of America’s global commodities and derivatives research, during a recent energy

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roundtable.

Natural gas prices are down 10% year to date, largely because of milder winters and a supply glut. But industry watchers are betting on increasing gas exports and greater power demand from the on-shoring of manufacturing facilities and AI data centers.

“These … centers have to run 24/7,” BofA’s Blanch said. Power demand for data centers is expected to grow between 10% and 15% per year between now and 2030 — and that could account for up to 5% of total worldwide power demand by 2030.

“[Natural gas] will allow the infrastructure to be built and let it power the generation plants to make electricity,” Dennis Kissler, senior vice president at BOK Financial, told Yahoo Finance. “Natural gas will be the fuel of the future,” he added.

Case in point: Energy equipment maker and servicing company GE Vernova (GEV) recently raised its projections for its gas turbines.

“You think about the US, and between 40% to 45% of our electricity comes from gas power today, and we’re about to go into a real load cycle,” GE Vernova CEO Scott Strazik recently told Yahoo Finance. “In the rest of the world, that number is closer to 25%. But as other parts of the world shift like the US has shifted — with things like coal to gas — the proportion of gas electricity will only grow.”

The fuel of the future? A natural gas treatment plant. (Getty Creative) · SergBob via Getty Images

The erosion of regulation surrounding the energy business, which is anticipated under the new Trump administration, is also expected to benefit the industry.

For example, the administration is expected to get rid of restrictions surrounding liquified natural gas (LNG) export permits and pipeline projects. “Regulations act as an added cost,” said Philip Rossetti, a resident senior fellow at the right-leaning R Street Institute. “If you’re expecting less regulation you’re probably going to be expecting more profitability.”

Oklahoma-based natural gas processing and transportation company the Williams Companies (WMB) and oil and gas midstream operator Oneok (OKE) are both up more than 40% year to date.

Meanwhile, US LNG exports are expected to rise 15% next year, according to government data, as Europe continues to build storage capacity to reduce its dependence on Russia amid the Ukraine war.

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“Europe is in a stage right now to increase their infrastructure for LNG, and a lot of that LNG is going to come from the US,” said BOK Financial’s Kissler.

S&P Global Commodity Insights predicts prices at Henry Hub, the main futures contracts delivery point, will average more than $4.00 per million metric British thermal units (MMBtu) in 2025 after two years averaging below $3.00/MMBtu.

“The uptick in exports will put significant strain on the domestic US natural gas market,” the organization’s 2025 energy

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report said.

Still, some Wall Street analysts believe the full impact of policy changes around exports and delays around LNG supply projects may delay an upward price move in the commodities market. Goldman Sachs analysts now expect natural gas to reach $4/MMBtu in 2026 instead of its previous timeline of the fourth quarter of 2025.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at

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