How AI energy demand in 2025 will put natural gas in the spotlight

Natural gas (NG=F) prices are on track to close out the year in negative territory. But there's optimism for 2025, largely because of exports and more demand stemming from artificial intelligence.

"We’re constructive on power, and because we’re constructive on power, we think natural gas is going to perform well," said Francisco Blanch, head of Bank of America's global commodities and derivatives research, during a recent energy outlook roundtable.

Natural gas prices are down 13% year to date, largely because of milder winters and a supply glut. But industry watchers are betting on increasing gas exports and greater power demand from the on-shoring of manufacturing facilities and AI data centers.

"These ... centers have to run 24/7," BofA's Blanch said. Power demand for data centers is expected to grow between 10% and 15% per year between now and 2030 — and that could account for up to 5% of total worldwide power demand by 2030.

"[Natural gas] will allow the infrastructure to be built and let it power the generation plants to make electricity," Dennis Kissler, senior vice president at BOK Financial, told Yahoo Finance. "Natural gas will be the fuel of the future," he added.

Case in point: Energy equipment maker and servicing company GE Vernova (GEV) recently raised its projections for its gas turbines.

"You think about the US, and between 40% to 45% of our electricity comes from gas power today, and we're about to go into a real load cycle," GE Vernova CEO Scott Strazik recently told Yahoo Finance. "In the rest of the world, that number is closer to 25%. But as other parts of the world shift like the US has shifted — with things like coal to gas — the proportion of gas electricity will only grow."

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