Morgan Stanley Sees LNG Exports and 3 Bcf/d Supply Growth Supporting Gas Prices Through Q3 2026
MS•Morgan Stanley expects U.S. natural gas prices to stay firm through Q3 2026 driven by rising LNG exports, 3 Bcf/d Lower 48 supply growth and AI-driven power demand. The bank warns a 2027 wave of new LNG capacity could soften prices while Iran conflict disruptions support tighter market balances.
1. Strong Near-Term Gas Outlook
Morgan Stanley projects U.S. natural gas prices to remain supported through Q3 2026 based on recovering Lower 48 production and roughly 3 Bcf/d supply growth this year coupled with sustained LNG export volumes.
2. Looming 2027 Supply Surge
A significant influx of new LNG export capacity slated to begin operations in 2027 could introduce substantial oversupply, prompting Morgan Stanley to forecast a softer natural gas price environment beyond 2026.
3. Growing Demand from Power and AI
Rising power sector demand, driven by record electricity consumption for data centers and AI infrastructure, is expected to bolster natural gas offtake and maintain tighter market balances in the near term.
4. Geopolitical Tightness from Iran Conflict
Disruptions tied to the Iran conflict are projected to reduce Middle Eastern LNG exports, further tightening global supply and supporting U.S. gas prices through the end of the decade.
