Natural Gas Prices Soar Amid Arctic Blast
Natural gas prices surged by 25% to $3.89 per million British thermal units on Wednesday morning, marking the best day for natural gas in four years. The spike is attributed to an arctic blast affecting large parts of the United States, with the National Weather Service warning of wind chills hitting as low as -50 degrees Fahrenheit in the Upper Midwest and Northern Plains.
In addition to the weather, structural changes in the market contribute to a positive outlook for natural gas, as the U.S. has become the world’s largest LNG exporter, absorbing over 14% of total natural gas production. Demand is predicted to rise significantly, driven by both cold weather and increasing usage in AI data centers.
Devon Energy Corp. (DVN), a leading producer in the Delaware Basin, is identified as a top stock in this environment, trading at under nine times forward earnings, significantly lower than the sector average. The company is set to benefit from improved pipeline access and the increasing demand for natural gas.
