Oil Prices Surge Amid Warning of Looming Natural Gas Shortage
The price of oil has risen to $82.47 a barrel after a 17% increase in a month, pushing gas prices to a national average of $4.01 per gallon. This surge threatens to erase the only positive Consumer Price Index reading this year.
Matt Smith, a limited partner at Chronometer Partners, predicts that the United States will face a natural gas shortage by 2028 and exhaust storage by 2030 due to increasing demand from AI data centers and liquefied natural gas exports. This would lead to a trade-off between exporting natural gas, using it for AI compute, or keeping electricity prices low for households.
The Energy Information Administration's Annual Energy Outlook projects US LNG export capacity rising to 27.7 billion cubic feet per day by 2030, with production keeping pace and Henry Hub averaging $3.50 in 2026 and $3.18 in 2027. Smith argues that natural gas fuels roughly 40% of US electricity while data center load explodes.