Natural gas takes center stage
As oil markets grapple with oversupply concerns, US energy producers are increasingly turning their attention to natural gas, where surging LNG export demand is creating new growth opportunities.
The shift comes as the United States prepares to add significant LNG export capacity in 2026, with new facilities coming online that will cement America's position as a global energy powerhouse.
LNG exports set to climb
According to the US Energy Information Administration, total LNG exports are expected to reach 16.4 billion cubic feet per day (Bcf/d) in 2026, up from 11.9 Bcf/d in 2024 - an increase of nearly 40% in just two years.
Three major facilities are driving this growth:
- Plaquemines LNG - New Louisiana export terminal (Phases 1 & 2)
- Corpus Christi LNG Stage 3 - Expansion of existing Texas facility with seven midscale trains
- Golden Pass LNG - New facility adding additional export capacity
Together, these projects will add approximately 5.3 Bcf/d of new nominal export capacity, representing nearly 50% expansion of existing US LNG infrastructure.
Europe drives demand
Europe's ongoing separation from Russian pipeline gas has created sustained demand for American LNG. As the continent seeks to diversify its energy supplies, US exports are increasingly filling the gap left by reduced Russian flows.
This positions the United States as a central pillar of global energy security, a role that is expected to expand throughout 2026 and beyond.
Data centers fuel domestic growth
Beyond exports, domestic natural gas demand is receiving a boost from an unexpected source: data centers. The rapid expansion of artificial intelligence and cloud computing infrastructure is driving electricity demand, much of which is met by natural gas-fired power plants.
This dual demand driver - exports and data centers - is supporting bullish sentiment in gas markets even as oil faces headwinds.
Price outlook strengthens
Henry Hub natural gas prices are forecast to average around $4.00 per million British thermal units (MMBtu) in 2026, up from approximately $2.19/MMBtu in 2024. This near-doubling of prices reflects tightening supply-demand fundamentals.
Current prices around $3.24/MMBtu suggest the market is already pricing in stronger demand, though EIA expects milder weather in early 2026 and rising production to moderate some of the upward pressure.
Investment implications
The divergence between oil and gas outlooks is reshaping corporate strategy:
- Natural gas and LNG companies are boosting capital expenditure and expanding shale acreage
- Oil-focused producers remain cautious, awaiting structural changes in global supply-demand before committing to major investments
This pivot toward gas assets marks a notable shift from the oil-dominated investment patterns of recent years.
Infrastructure challenges ahead
The expansion is not without obstacles. Pipeline capacity in key producing regions like the Permian Basin is struggling to keep pace with rising demand. New takeaway capacity is coming, but much is timed for later in 2026.
This timing mismatch could create temporary tightness in Gulf Coast markets and increase price volatility at Henry Hub as exports rise before new supply routes are fully operational.