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Natural Gas to Hit $3 by 2025 on AI Boom, Haynes and Boone Says


These translations are done via Google Translate
US natural gas is expected to reach the $3 mark as soon as next year as electricity-hungry data centers drive demand for the power-plant fuel, according to law firm Haynes and Boone LLP.

An unseasonably mild North American winter and ample supplies sank US gas futures to within six cents of a 28-year low in recent months, heightening concerns about so-called borrowing bases among drillers, according to Haynes and Boone’s survey of private equity firms, energy producers and oilfield-service companies.

The glut-driven price drop also prompted some companies to curb hedging aimed at shielding them from market volatility, the survey found. The last time gas was above $3 per million British thermal units was mid-January.

“We’re seeing producers hedge a little less aggressively, which could be a nod to those rock-bottom natural gas prices,” said Kim Mai, a partner in Haynes and Boone’s energy practice. “It shows they’re nimble and can adjust their strategies as the market changes.”

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As for oil, the survey found respondents largely bullish, with one-fourth expecting a significant increase in bankers’ willingness to lend to crude-focused drillers.

“The oil market has newfound positivity, with borrowing base increases possible for some producers,” said partner Kraig Grahmann. But natural gas market distress is “countering the oil boom.”



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