Lagging Storage Capacity Raises Natural Gas Price Risks Amid LNG, Data Center Demand, Analysts Say

Natural gas price volatility is expected to persist without the addition of storage capacity to mitigate price spikes amid increases in LNG demand and utility load to feed the voracious appetite of data centers, industry experts said.

“Storage’s ability to smooth out short-term and seasonal demand swings has diminished as supply and demand increase while storage capacity remains relatively static,” NGI’s Dan Spangler, director of analytics, said at the LDC Gas Forums Northeast in Boston.

In winter 2023/24, the Henry Hub spot price average fell to $1.725/MMBtu in February after spiking to $13.080 in January, when a winter storm blanketed large swaths of the country, NGI’s Daily Historical Data showed.