U.S. Natural Gas Slips 0.86%, but Higher Prices May Be Ahead
Natural gas prices are likely to climb to $5 per MMBtu according to some analysts thanks to data center growth.
Quick overview
- U.S. gas futures fell to $3.21 per MMBtu, while Wood Mackenzie predicts a potential rise to $5 by 2035 due to increasing demand.
- Warming temperatures and rising exports are expected to drive U.S. LNG rates higher in the coming months.
- The growth of data centers, which heavily rely on natural gas for power, is likely to significantly increase demand and push prices up.
- Current domestic natural gas inventory levels are elevated but may not be sustainable as data center energy needs continue to rise.
On Monday, U.S. gas futures fell to $3.21 per MMBtu, but global consultancy firm Wood Mackenzie set a price of $5 for natural gas.
Warming temperatures and rising demand could push U.S. LNG rates higher in the coming months. Gas futures are above $3 now, but Wood Mackenzie analysts say they could reach as high as $5 per MMBtu by the year 2035. The deciding factor for that price jump could be increasing demand due to climbing exports.
Prices remain elevated in the domestic natural gas market. The price dropped slightly on Monday as weather patterns changed and oil prices dipped, but with a price point above $3 per MMBtu, the current rate is higher than it was through much of the 2026 spring season.
Data Centers May Drive Prices Much Higher
There has been much talk about data centers using precious resources to power their services, and one resource they are using more of each month is natural gas. Many data centers use LNG as a means to power air conducting units that cool massive server rooms, and as the industry grows and more of these centers are built, the need for more natural gas is only going to grow.
These centers also use natural gas to power generators that supply electricity to the facilities. As more data centers pop up around the globe, the need for the United States’ vast domestic LNG supply is likely to grow. By 2030, the power needs for data centers could exceed 945 TWh (terawatt hours). Natural gas is going to supply much of that, which is exactly why Wood Mackenzie analysts think the price of LNG will jump domestically and stay high in the coming years instead of going through cycles of highs and lows but not changing much from year to year.
The current inventory levels are elevated, but that may not last much longer as data center energy needs increase. Levels for domestic inventories remain about 6% above the five-year average, rising from the previous year’s already elevated levels. The rising temperature and dropping oil prices are not strong enough indicators to predict where the price of LNG will be in the next five-years or so, but data center growth is, and that factor points towards rising prices as demand grows and supplies diminish at a rate that may not be sustainable over the long run.
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