Investing.com -- Bernstein analysts are forecasting the onset of a U.S. natural gas supercycle, driven by a combination of robust demand growth and constrained supply. In a detailed sector outlook, Bernstein projects that total U.S. gas demand will rise from approximately 120 billion cubic feet per day (bcfd) in 2024 to about 148 bcfd by 2030.
The key drivers of this growth are an expected surge in liquefied natural gas (LNG) exports and a sharp increase in power demand, particularly from data centers.
According to the Bernstein report, LNG exports are forecast to grow by 10 bcfd through the end of the decade, based on projects that are already sanctioned or under construction.
The analysts see this export-driven demand as “highly certain,” emphasizing that international markets will account for the vast majority, around 80%, of the demand growth over this period.
Power demand is expected to add another 8 bcfd, continuing a linear trend observed over the past two years.
This increase is attributed primarily to data center expansion, which the report characterizes as a structurally new source of demand.
Despite ongoing coal plant retirements, Bernstein assumes that renewables will largely offset the lost generation capacity, but acknowledges that natural gas could fill some of the gap depending on renewable deployment rates.
While demand is projected to climb steadily, supply growth appears more constrained.
Bernstein highlights that over 70% of U.S. gas supply does not interact with price due to either being associated with oil drilling or limited by infrastructure constraints.
In particular, production from Appalachia, the nation’s largest gas-producing region, is expected to remain flat due to pipeline limitations.
This leaves the Haynesville and Midcontinent regions as the primary sources of flexible, price-responsive supply.
Bernstein models suggest that to balance the market, these basins will need to contribute an additional 17 bcfd by 2030.
However, current activity levels, particularly in the Haynesville, are below the necessary pace, raising concerns about the industry’s ability to respond.
The supply-demand mismatch leads Bernstein to forecast a sustained rise in gas prices.
Their model indicates a long-term equilibrium price around $5 per million cubic feet (mcf), above recent spot and forward prices.
Under more bullish assumptions, such as a shortfall in Haynesville growth, prices could exceed $8 or even $10/mcf, triggering both demand destruction and increased incentive for supply expansion.
Bernstein’s assessment calls this environment a “supercycle,” driven not by speculative hype but by underlying structural trends.
They stress that global dynamics, including rising LNG demand for power and transport in Asia, will ensure that U.S. exports continue to run at or near capacity, further tightening the domestic market.
In this context, Bernstein recommends increased exposure to gas-weighted equities, naming EQT (ST:EQTAB) as their top investment idea to capture long-term value from this structural shift.