At Any Rate
Global Commodities: So much noise in the US natural gas market
Apr 11, 2025
Otar Dgebuadze, Vice President of Global Commodities Research at J.P. Morgan, shares insights on the changing dynamics of the U.S. natural gas market. He discusses the anticipated gas-to-coal switching trends in summer 2025 and the potential price impacts due to weather risks. Dgebuadze also highlights expected production increases in 2026 that may stabilize prices. Additionally, he touches on how recession risks might influence future demand and supply in this fluctuating energy landscape.
09:28
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Quick takeaways
- The natural gas market is facing a significant shift with record LNG feed gas flows creating a structural increase in demand while renewable energy sources contribute to reduced gas consumption.
- The potential economic recession poses risks for industrial demand in the U.S. natural gas market, affecting petrochemical sectors, while residential demand may remain stable despite fluctuations in production and pricing.
Deep dives
Demand Dynamics for Natural Gas
The current demand dynamics for natural gas highlight significant influences from liquefied natural gas (LNG) and power generation sectors. Notably, LNG feed gas flows have reached record levels, exceeding 16 billion cubic feet per day, as new facilities come online, which indicates a structural increase in demand. Additionally, there has been a notable shift in power generation where stronger renewable sources like solar and wind have contributed to a decline in gas burns. As a result, the overall demand from the power sector is projected to decrease by about 2.1 billion cubic feet per day, primarily due to weather variations and transitions towards renewable energy amidst higher natural gas prices.
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