| DAILY ISSUE The Natural Gas Reckoning Is Overdue – Prepare Now VIEW IN BROWSER Hello, Reader. Nine months ago, I realized a strange disconnect in the natural gas market: Gas prices rose, yet natural gas stocks fell. The First Trust Natural Gas ETF (FCG) captured this mismatch perfectly: Its share price dropped nearly 10% in the six weeks preceding March, even though natural gas prices had surged more than 40% during that same period. I argued that “sooner or later” natural gas stocks would have to wake up to the strength in the underlying commodity. Like a hibernating animal, they are still asleep. But the time has come for natural gas stocks to reflect the bullish trends already underway beneath the surface. Here’s why… The longer an extreme mispricing persists, the more forcefully it tends to resolve itself. In this case, therefore, either natural gas stocks begin soaring, or the natural gas price starts tanking. I expect the former, mostly because the natural gas market is sitting on a stack of bullish fundamentals that is taller, sturdier, and more visible than it was when this anomaly first appeared. In short, the reckoning between gas prices and gas stocks is overdue, especially because natural gas demand continues to rise far faster than supply. The Energy Information Administration expects U.S. gas demand to surge 5.8% over the next two years, while supply grows only 3.6%. When demand grows almost twice as fast as supply, inventories drain. And when inventories drain, the price floor tends to shift higher. Gas consumption from traditional sources – U.S. industries and households – continues its steady climb. But now, a couple of new kids on the block are muscling their way into the natural gas market. Their names are “Liquid Natural Gas” (LNG) and “AI Data Centers.” In today’s Smart Money, let’s dive into how these “new kids” are increasing demand. Plus, I’ll share the play to get in on early, before natural gas stocks wake up from their hibernation… | Recommended Link | | | | Insiders in Washington have already bought massive stakes in three tiny resource firms, driving them up as much as 200% overnight. Now, the man who recommended MP Materials before the White House bought (making 100% for his followers) is naming the next stocks he believes the government will target. Get the names and tickers right here – free of charge. |  | | LNG: The Relentless New Source of Natural Gas Demand The United States has become the world’s largest LNG exporter. LNG plants along the Gulf Coast now absorb more than 14% of total U.S. natural gas production, and ship it to destinations in Europe and Asia. And as the chart below shows, these exports keep rising. 
Once an LNG facility starts up, its demand does not fluctuate with seasonal weather conditions. It pulls gas like a vacuum cleaner, nonstop, year-round, as long as a hefty price differential exists between pricey European gas and cheap U.S. gas. But the LNG story does not end at the Gulf Coast. For years, U.S. gas consumers enjoyed a hidden benefit: Canada exported large volumes of cheap natural gas southward. Those imports helped cap U.S. prices during tight periods. That era is ending. Last summer, Canada shipped its first-ever LNG shipments to Asia from a new facility in British Columbia. At first, the plant will ship about 1.8 billion cubic feet (bcf) of natural gas per day – equal to about one quarter of the gas Canada currently pipes down to the U.S. But by the end of the decade, it may divert as much as 5 bcf per day. Every Canadian gas molecule that sails west into Asia is a molecule that does not flow south into the United States. In other words, a long-standing source of America’s natural gas supply is beginning to shrink. AI Data Centers: The Wild-Card Demand Shock A second major source of natural gas demand has also arrived on the scene: data centers. Although AI runs on “the cloud,” the cloud does not run on vapor. It runs on electricity. And that electricity increasingly comes from natural gas. Goldman Sachs estimates that natural gas will power 60% of incremental electricity demand from AI data centers over the next few years. This new demand is not hypothetical. LandBridge Company LLC (LB), a major landholder in the Delaware Basin in West Texas and southeastern New Mexico, is already pitching a “Data Center Alley” concept built entirely around natural-gas-fired power plants. Three months ago, the company announced a new joint venture with NRG Energy Inc. (NRG) to build a natural gas-powered data center site in the Delaware Basin, which sits in the northwest portion of the Permian Basin. Importantly, the building site LandBridge would contribute to the venture lies adjacent to the Waha gas market hub. That strategic location provides direct access to substantial low-cost natural gas and existing transmission infrastructure. With LNG on one side and AI data centers on the other, natural gas suddenly finds itself with more suitors than it can handle. This is where the opportunity lies. And here’s the best way to capitalize on it… Positioning Ahead of a Structural Turn For the last few years, the Delaware Basin has been rapidly boosting its production of both oil and gas. Unfortunately, gas volumes have overtaken pipeline capacity. As a result, much of the gas from the Delaware Basin is “stranded” – the oil and gas industry’s polite way of saying “worthless unless you can move it.” Producers flared it. Trucked it. Discounted it to oblivion. As such, the Delaware Basin has behaved for years like a brilliant student stuck in detention. It held enormous potential, but no way to express it. And now, detention is ending. In fact, the opportunity in this region is more like a scholarly pupil prepping for a pop quiz. It’s coming – that much is known – so it’s best to be prepared early for when it does. That is why I recommended one of the leading producers in the Delaware Basin to my Fry’s Investment Report subscribers a little over a year ago. This “Buy” was an early call on natural gas. This company is positioned squarely at the intersection of LNG exports, AI-driven power demand, and shrinking Canadian supply. The result is a company positioned to thrive as the natural gas market turns. It currently trades at a deep discount, priced at barely half the valuation of the companies in the First Trust Natural Gas ETF. So, the time to get in is now. Click here to learn how to access the name of this natural gas play. Regards, | 
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