By Scott DiSavino
After a year of production cuts, U.S. gas producers are set to increase output in 2025 due to growing demand from liquefied natural gas export facilities, driving prices up from multi-decade lows.
The U.S. Energy Information Administration predicts a decline in gas production for 2024, followed by a rebound in 2025 as demand for exports rises.
Analysts estimate that average annual gas prices will surge by more than 40% in 2025 compared to 2024 levels, driven by increased demand for LNG and pipeline exports.
The EIA projects a rise in total gas demand, with a significant portion attributed to a 14% increase in LNG exports, while domestic use is expected to decline.
Major gas producers are gearing up to meet this export demand, with expectations of higher production in the coming year.
Analysts anticipate a three-year high in Henry Hub gas prices in 2025, signaling a potentially tighter supply-demand situation for natural gas.
Overall, the outlook for 2025 shows a positive trend for U.S. gas producers, with potential growth opportunities in the LNG market and increased revenue from higher prices.
Analysis:
In summary, U.S. gas producers are expected to ramp up production in 2025 to meet rising demand from LNG export facilities, leading to a significant increase in gas prices. This shift in the market dynamics presents growth opportunities for producers and could result in higher revenues. As a consumer, it’s important to monitor these developments as they can impact energy costs and overall financial stability.