U.S. Natural Gas Prices Poised for Surge as LNG Exports Resume and Power Demand Rises

The U.S. natural gas market is on the cusp of a pivotal shift. After months of maintenance-driven slowdowns at key liquefied natural gas (LNG) export terminals, production is ramping up just as summer power demand peaks. This confluence of factors—revived LNG exports, robust global demand, and constrained supply—creates a compelling case for a sustained price surge in natural gas.

The Maintenance Wrap-Up Fuels an Export Rebound

In May 2025, U.S. LNG exports dipped to 8.9 million metric tons, a 4% decline from April's record high, as planned maintenance at facilities like Cheniere's Sabine Pass and unplanned outages at Freeport LNG curtailed output. However, by June, terminals began returning to full capacity. Sabine Pass, the largest U.S. LNG plant, exited its two-week maintenance cycle in mid-June, while Freeport resolved its technical issues.

The resumption coincides with critical capacity additions. Venture Global's Plaquemines Phase 1, operational since December 2024, is now fully ramped up, and Cheniere's Corpus Christi Stage 3 added four midscale trains by late June. Combined with the delayed-but-still-anticipated Golden Pass LNG (targeting 5.3 Bcf/d capacity), these projects could boost total U.S. LNG export capacity to 14.2 Bcf/d by year-end, according to the EIA.

LNG Exports: The Global Demand Catalyst

Europe remains the linchpin of demand. With Russian pipeline supplies dwindling and storage levels at 43% as of April, the continent is reliant on U.S. LNG to refill inventories ahead of winter. European buyers paid a $8/MMBtu premium over U.S. Henry Hub prices in May, a gap that incentivizes U.S. exporters to maximize shipments.

Asia, however, presents a mixed picture. While Middle Eastern LNG's cost advantage has limited U.S. exports to the region (accounting for just 21% of May's total), Beijing's tariff-avoidance strategy—reselling U.S. cargoes to third parties—adds volatility. Still, the $11.68/MMBtu Dutch TTF benchmark in May signals Europe's insatiable hunger for U.S. supplies, a trend likely to persist through 2026.

Power Demand Surge Adds to Tightening Markets

Summer heatwaves are driving up power generation needs, with U.S. natural gas-fired plants accounting for 40% of electricity generation. Compounding this is constrained supply: domestic production dipped to ~104 Bcf/d in June due to pipeline maintenance, below March's record 106.3 Bcf/d.

Meanwhile, storage inventories remain precarious. Despite a 122 Bcf injection in late May, stocks trail 2024 levels by 375 Bcf, leaving little buffer for sudden demand spikes. The EIA forecasts Henry Hub prices to average $4.20/MMBtu in 2025 and $4.50/MMBtu in 2026, with prices peaking at $4.80/MMBtu by late 2025 as exports and power demand converge.

Risks to the Bullish Scenario

Geopolitical risks loom large. A Red Sea trade route reopening or a U.S.-China trade deal could disrupt Asian LNG flows, while delays at Plaquemines Phase 2 or Golden Pass could shave 0.8 Bcf/d off 2026 export forecasts. Yet these risks are secondary to the structural demand from Europe and the U.S. LNG industry's cost advantage ($3.50/MMBtu breakeven).

Investment Implications: Time to Buy the Dip

The resumption of LNG exports and summer demand create a buy signal for natural gas equities.

1. LNG Exporters Lead the Charge:
2. Cheniere (LNG): With Sabine Pass and Corpus Christi Stage 3 operational, Cheniere is positioned to capitalize on export growth. Its stock, down 18% YTD due to maintenance impacts, offers a 12.7% historical return during Europe's storage refill season (July–October).

3. Freeport LNG (FPT): The resolution of its May outages and participation in Europe's LNG hunger make FPT a contrarian play.

4. Natural Gas Producers:

5. Devon Energy (DVN) and EOG Resources (EOG) benefit from higher gas prices, though their broader oil exposure dilutes pure-play upside.

6. ETF Plays:

7. The United States Natural Gas Fund (UNG) tracks front-month futures, offering direct exposure to price spikes.

Conclusion: A Structural Bull Market Emerges

The U.S. natural gas market is entering a period of sustained tightness. With LNG exports resuming post-maintenance, European storage refill demands peaking, and summer power needs surging, the Henry Hub price is primed to test $5/MMBtu by year-end. Investors should prioritize LNG exporters and gas-dedicated equities, as the structural shift from oversupply to scarcity is just beginning.

Investment Recommendation: Overweight LNG exporters (LNG, FPT) and use UNG for tactical exposure to price spikes. Avoid pure-play storage or pipeline stocks, which lack the leverage to rising prices.

The gas market's summer rally is not just cyclical—it's a preview of a new era.