More demand for natural gas in Texas

[dan_s]

Read more here: https://www.chron.com/business/technology/article/data-center-ai-billion-computing-20028833.php

Texas' growth as a technology and data homebase isn't slowing down anytime soon. This week, three firms announced the development of a massive, $1 billion data center being planned for North Texas.

Because it'll be constantly working with so much data, GigaPop's operations will require up to 540 MW of power. Data centers generally consume gobs of power; for comparison's sake, one MW can power at least 200 homes. According to Reuters via a recent Department of Energy-backed report, data center power demand could eat up "as much as 12 percent of the country's electricity" by 2028. This is because cloud computing and especially AI require so much data.
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Growing electricity demand (NGas fired power plants) for AI data centers is the 3rd reason for why I am bullish on U.S. natural gas prices. Growing demand for LNG export facilities is MUCH LARGER.

[dan_s]

"US natural gas futures rose 2% toward the $3.9 per MMBtu mark on Tuesday, trimming the 11% plunge from the two prior sessions, and not far from the two-year high of $4.3 touched last week amid the outlook of lower supply and a pickup in heating demand. US President Trump lifted the moratorium on new LNG export licences in his first day in office, confirming previous pledges during his campaign. The measure allows domestic natural gas producers to take advantage of higher prices overseas and force consumers to compete with higher prices in major LNG hubs in Europe and Asia. In the meantime, freezing temperatures in the Southern states raised demand for heating in households and frozen power grids. Meanwhile, federal data showed a significant withdrawal of 258 billion cubic feet of gas from storage for the week ending January 10th, far exceeding the 150 bcf withdrawn in the corresponding period of the previous week." - Trading Economics

Keep in mind that as the end of the month approaches, Paper Traders must close / roll over their long positions in the front month futures contracts.