Investing.com — Natural gas prices are expected to undergo a significant transformation in 2025, as per analysts at BofA Securities. 

Analysts suggest that markets are likely to see tightening supply and rising prices driven by factors such as increased liquefied natural gas export demand and reduced production growth in key basins like the Haynesville. 

This aligns with a broader structural shift toward higher demand for natural gas in both domestic and international markets.

According to BofA’s projections, natural gas prices may reach a baseline of $4.00 per MMBtu on the NYMEX, marking an increase from earlier expectations. 

This price increase is underpinned by tight supply-demand balances expected in the second half of 2025. 

The start-up of LNG export projects, such as Plaquemines LNG and Corpus Christi Stage 3, will add new demand, potentially exceeding the ability of U.S. producers to meet this demand with current supply growth levels. 

These facilities alone are expected to create an incremental demand of 3.5 billion cubic feet per day.

The report highlights challenges in production growth, particularly in the Haynesville Basin, which faces structural barriers such as declining rig counts and constrained infrastructure development. 

The analysts note that production in the basin has been declining steadily, with limited ability to ramp up to meet new demand. 

Consolidation among producers in the Haynesville is seen as a double-edged sword: while it has improved operational efficiency, it has also reinforced production discipline, meaning producers are unlikely to oversupply the market.

Meanwhile, LNG demand and domestic electrification are seen as long-term drivers for natural gas consumption, positioning natural gas as a critical component of energy transition strategies. 

BofA analysts argue that global LNG arbitrage opportunities further strengthen the case for higher U.S. natural gas prices, as international markets remain willing to pay a premium for gas compared to domestic benchmarks.

On the other hand, oil markets face a more challenging outlook in 2025, with BofA projecting an oversupply scenario that could keep oil prices suppressed. 

This dynamic is expected to amplify the appeal of gas-leveraged exploration and production companies relative to their oil-focused counterparts. 

Since gas valuations remain relatively undervalued compared to long-term fundamentals, BofA sees potential for a re-rating of gas-focused equities.

In the Canadian context, the upcoming Shell-operated Canada LNG export facility is expected to provide a macroeconomic boost for Western Canadian natural gas producers. 

Although the full ramp-up of this facility will take time, it is anticipated to tighten the AECO basis over time, benefiting producers like Ovintiv (NYSE:), which was upgraded to a “Buy” by BofA on this thesis.

By Pesha Magid

RIYADH (Reuters) – Chile’s Codelco, the world’s largest producer, is in talks with Saudi Arabia over potential joint investments in the metal, the company’s chairman told Reuters in an interview on Friday.

On Codelco’s output, Chairman Maximo Pacheco said the company’s own production for 2025 was expected to rise by about 70,000 metric tons to around 1.4 million tons.

Pacheco said the state-owned company had been in discussions with Saudi Arabia as there was a clear need on both sides to add value.

“We would be very open to considering joint investment opportunities,” said Pacheco in an interview following a gathering of miners for the kingdom’s annual Future Minerals Forum.

Saudi Arabia has been pursuing critical minerals including copper and lithium, bidding to become a hub for battery and electric vehicle manufacturing as part of Crown Prince Mohammed bin Salman’s plan to wean the economy off oil.

Pacheco said he had met with the Saudi mining minister and representatives from Manara Minerals, a joint venture between Saudi Arabian Company and the kingdom’s $925 billion Public Investment Fund.

He said that he hoped that an announcement from the discussions could emerge in the coming months.

“The markets move very fast. So obviously we need to move fast as well,” said Pacheco.

He said he had discussed technology transfers with Saudi Arabia, noting the kingdom’s experience with desalination. The two sides also talked about introducing new technologies, such artificial intelligence, into mining.

Saudi Arabia’s mining minister Bandar al-Khorayaf previously told Reuters that Saudi Arabia was interested in Chile’s lithium assets.

Codelco has been seeking a partner on a major lithium project in the Maricunga salt flat. Pacheco said the company had short-listed potential investors and Saudi companies were not on that list.

He suggested the board would vote on the project in March.

Faced with declining ore grades, accidents and mistakes at major construction projects, Codelco has been struggling to lift production from 25-year lows and revved up output at the end of the year to hit its 2024 target of reaching 1.328 million metric tons.