Natural Gas Surges to Yearly Highs: What It Means for Energy Markets in 2025
- Delanta Frink
- Mar 9
- 2 min read
As of early 2025, natural gas futures (/NG) have surged to their highest levels in over a year. The chart above reflects a strong bullish momentum in the market, driven by a combination of global energy demand, shifting geopolitical dynamics, and evolving U.S. energy policies. With a transition in administration and differing views on energy policy, the future of natural gas pricing remains uncertain—especially as debates over drilling, liquefied natural gas (LNG) exports, and environmental regulations intensify.
The Role of Natural Gas in Global Supply and Demand
The U.S. is one of the world’s largest producers and exporters of natural gas, particularly in the form of LNG. American LNG exports have become a critical component of global energy security, supplying Europe, Asia, and other regions. Factors driving the current price surge include:
Increased European Demand: With geopolitical instability and ongoing supply concerns, Europe continues to rely heavily on U.S. LNG imports.
Asian Market Growth: China and India’s growing economies are pushing demand higher for U.S. LNG, particularly as coal plants are phased out.
Domestic Consumption & Storage: Colder winters, increased electricity generation, and industrial usage in the U.S. have all played a role in driving demand.
The Impact of More Drilling vs. Less Drilling
The future price of natural gas is largely dependent on U.S. drilling policies. The incoming administration’s stance on domestic energy production will play a crucial role in shaping the market over the next year.
Scenario 1: More Drilling & Increased Production
If policies favor increased drilling, natural gas production will likely rise. This would lead to:
Lower prices due to greater supply.
Increased LNG exports as the U.S. capitalizes on global demand.
Energy independence with reduced reliance on foreign imports.
Potential environmental push back from those advocating for greener alternatives.
Scenario 2: Less Drilling & Stricter Regulations
If restrictions are placed on drilling and pipeline development, expect:
Higher prices due to supply constraints.
Increased volatility as global demand remains strong while U.S. supply tightens.
More reliance on renewables but with a potential energy gap during peak demand periods.
Geopolitical risk as foreign producers (e.g., Russia, Qatar) gain more leverage over global natural gas markets.
Looking Ahead: Natural Gas in 2025 and Beyond
Given the bullish momentum in the chart, natural gas prices could remain elevated as long as global demand stays strong and domestic supply remains constrained. However, any shifts in policy—whether favoring or restricting drilling—will be critical in determining whether this rally continues or reverses.
We could see $5.00ish levels touched in the near future. Lets see how the 🎲 roll.
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