onurdongel/E+ via Getty Images
The Biden administration is proposing regulations that could cause more than 90% of coal and natural gas facilities to require carbon capture by 2032, which could double or triple power prices and “sabotage” the ability to meet U.S. needs for power demand and energy needs for the economy, EQT Corp. (NYSE:EQT) CEO Toby Rice told CNBC in an interview Monday.
The natural gas market as still oversupplied but “the activity response coupled with a weather forecast that’s hotter than normal has caused pricing in the front month to rally up over $0.50 in the last few weeks, so it is starting to be more constructive, and the you add new demand for power from the AI boom… and things are looking pretty exciting for natural gas,” the CEO said.
“For the first time in decades, the United States is going to see a material increase in power generation needs… and our estimate is that we’re going to see a 75 GW increase to support AI and tech companies and their aspirations… speed matters and scale matters… these are going to lead to a greater market share coming from natural gas.”
U.S. natural gas futures extended their three-week rally on Monday, with the June front-month Nymex contract (NG1:COM) closing +4.8% to $2.751/MMBtu, as early season heat in Texas drives demand and prospects of a gradual reduction in inventory surpluses.
ETFs: (UNG), (BOIL), (KOLD), (UNL), (FCG)
“Texas will remain quite hot much of the next eight days, and that has contributed to above normal national [cooling degree days] for so early in the season,” NatGasWeather.com says.
The two most recent U.S. storage reports showed below-estimate injections, “and this is expected to be the case with the next three EIA reports as they’re all expected to print slightly smaller vs. normal builds to drop surpluses under 600B cf for the first time in a few months.”
