Natural gas markets face a tight supply-demand balance in 2025. The EIA forecasts a 1.4 Bcf/d increase in supply, but demand is expected to rise by 3.2 Bcf/d, driven by growing exports and colder weather. This imbalance could lead to higher prices and storage drawdowns.
Natural gas markets are set to experience a delicate balance in 2025, with supply struggling to keep pace with rising demand. According to the U.S. Energy Information Administration (EIA), natural gas supply is projected to increase by 1.4 billion cubic feet per day (Bcf/d) in 2025, while demand is expected to rise by 3.2 Bcf/d1.
The primary driver of this demand growth is the increase in natural gas exports. The EIA anticipates that exports by pipeline and as liquefied natural gas (LNG) will increase by 2.9 Bcf/d in 2025, with most of this growth coming from LNG exports. The recent start-up of two new LNG export facilities, Plaquemines LNG and Corpus Christi LNG Stage 3, has significantly boosted these exports1.
However, the forecast also notes that consumption in the residential and commercial sectors will increase in 2025 due to colder weather. Conversely, consumption in the electric power sector is expected to decrease as natural gas prices rise and more renewables and coal are used to generate electricity, displacing some natural gas-fired generation capacity1.
The global gas balance remains fragile, with geopolitical tensions and extreme weather events continuing to impact market fundamentals. The International Energy Agency (IEA) warns that despite improvements in gas market fundamentals, significant tightness due to rising demand and muted growth in LNG capacity will persist. The IEA emphasizes the need for greater international cooperation to enhance gas supply security3.
1. What is the expected increase in natural gas supply in 2025?
Answer: The EIA forecasts a 1.4 Bcf/d increase in natural gas supply in 20251.
2. What is driving the increase in natural gas demand?
Answer: The primary driver is the increase in natural gas exports, particularly through LNG, which is expected to rise by 2.9 Bcf/d in 20251.
3. How will colder weather affect natural gas consumption?
Answer: Colder weather is expected to increase consumption in the residential and commercial sectors in 20251.
4. What is the impact of rising natural gas prices on electric power sector consumption?
Answer: Rising natural gas prices are expected to decrease consumption in the electric power sector as more renewables and coal are used to generate electricity1.
5. What is the current state of the global gas balance?
Answer: The global gas balance remains fragile due to rising demand and muted growth in LNG capacity, with geopolitical tensions and extreme weather events adding to market strains3.
The natural gas market in 2025 faces a challenging scenario with supply struggling to meet the rising demand. The increase in exports, particularly through LNG, and the impact of weather conditions on consumption will be crucial factors. However, the fragile global gas balance highlights the need for enhanced international cooperation to ensure stable and secure gas supplies.
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