NGAS – Daily Chart
NGAS surged from the election date to find a barrier above $4 and has been unable to get higher. The first support level comes in at the $3.41 level which was the high in early-2024.
After another year of sluggish gas markets in North America could lead to higher prices in 2025. Deloitte released a forecast for increased demand for Canadian natural gas, added to growing LNG shipping capacity, which could boost the price.
Further demand will help to clear an oversupply of natural gas that Canada saw throughout 2024, according to analyst Andrew Botterill.
A new LNG Canada export terminal is expected to come online mid-2025, which adds to export potential.
“Structurally, the natural gas market for 2025 just looks so much better,” Botterill wrote.
“I think companies are really teeing their budgets, being prepared for that opportunity to develop more of their natural gas opportunities”.
The main markets driving new demand for Canadian natural gas are markets in the US and Mexico, but that may depend on the tariff outlook.
“That means we’re going to have even more LNG exports off North America, so more opportunity for natural gas markets to be developed,” the report added. Energy markets have been stretched with the growth of AI data centers and that could add to demand in the coming year.
The Deloitte report said natural gas demand through electricity generation has grown by an average of 5% per year over the last decade, which the group expects will continue.
Low into mid-2024 were driven by increased drilling activity and some supply glut fears. But the latest analysis sees that imbalance cleared. US prices may improve as Donald Trump is focusing on energy security and will look to keep prices stable.
Extra American gas could help add supplies needed to allow Europe to break its energy ties with Russia, which have dropped again due to cold weather. Trump is expected to lift a Biden-era ban on new liquefied natural gas projects. Further efforts are expected to add new oil and gas drilling on federal lands.
For now, the market may see some correction if it cannot clear the latest obstacle.