Natural gas stocks. They’re likely to be some of the biggest winners this year. But the devil is in the details.
Let me explain…
Shortly after Trump took office, he signed an executive order declaring a national energy emergency. This, despite there being no energy emergency at all.
As I noted last week, the energy economy of the U.S. is stronger than it’s ever been. We’re the largest producer of oil and gas in the world, and U.S. exports of LNG are at an all-time high.
The downside, of course, is that natural gas prices are still clocking in below $4 per MMBtu. A far cry from 20 years ago, when natural gas was running at nearly $14 per MMBtu
But there’s still a silver lining in the form of LNG exports. Which, by the way, are now increasing, partly due to the Freeport LNG facility in Texas starting back up. This, after the deep freeze gave that facility a nasty smack in the mouth.
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Still, overall, the prospects for more LNG exports are solid.
Bullish on Natural Gas Stocks
From 2021 to 2023, U.S. LNG exports to Europe rose from around 22 million metric tonnes to almost 58 million metric tonnes. That’s a 160% increase in just two years. And this growth is expected to continue in 2025 as a result of rising demand in Europe.
President Trump has also threatened blanket tariffs on EU goods if it doesn't agree to buy more oil and gas from the U.S. I suspect this is little more than an aggressive negotiation tactic. After all, even before that threat, utilities in the EU were already planning to buy more.
For the sake of the Trump administration, it already has the advantage of the EU wanting to reduce Russian gas imports even further. To be sure, Russian sanctions do not include LNG imports. And I suspect that EU officials may have some concerns about trading an over-reliance on Russia for an over-reliance on the U.S.
Indeed, that latter makes far more sense from a security standpoint. However, Raphael Hanoteaux, the senior policy advisor on gas politics at environmental think tank E3G, recently asked the question: “Do we really want to be Donald Trump’s main client where he has leverage over Europe with gas? We’ve seen Russia using gas as a political weapon and it seems Trump is doing the same”
It’s a valid question, but I suspect the disdain that most EU members have for Trump still isn’t enough to get them to reconsider their desire to reduce Russian gas dependence.
But it doesn’t end there.
Earlier this week, Bloomberg reported that U.S. gas producers are now likely to gain additional market share in Asia.
US gas producers could gain Asian market share at the expense of Australian exporters in the long run, as countries running a trade surplus with the US, like Japan and South Korea, are compelled to buy more American LNG to avoid Trump’s tariffs, according to Bloomberg Intelligence.
Chinese buyers have already agreed to buy a combined 14 million tons of US LNG from 2026, 50% higher than the previous record in 2021, BI analysts including Chia Chen and Henik Fung said in a note on Tuesday. China might add more shipments to negotiate favorable tariffs with Trump’s administration, they said.
With increasing demand in Europe, coupled with increasing demand in Asia, you can be sure that American LNG exporters, such as Cheniere Energy (NYSE: LNG), will do quite well this year. Also consider FSRU companies (Floating Storage and Regasification Units). FSRUs are ships that store, transport, and re-gasify LNG. Excelerate Energy (NYSE: EE) is a key player here. The stock more than doubled last year, and will likely hit new record highs in 2025.
Indeed, the LNG sector is primed for a very profitable year. The same holds true for nuclear.
In fact, we just got word that Bill Gates and Sam Altman recently secured millions of dollars’ worth of a classified element to be used in a new generation of advanced nuclear reactors. Our research team here at Energy & Capital has been able to identify this “classified element,” and more importantly, the only company that’s producing it.
While we’re bullish on LNG, we are equally bullish on nuclear. And if you want to know why, check out this investor note that explains everything.
To a new way of life and a new generation of wealth…
Jeff Siegel
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Jeff is an editor of Energy and Capital as well as a contributing analyst for New World Assets.
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