Natural gas jumps 6% overnight. Which ASX gas giants stand to benefit?

Natural gas prices rose overnight, with the US benchmark up almost 6% to around US$3.23 per MMBtu.

This follows a volatile period for gas markets and shows how quickly sentiment can shift amid the return of geopolitical risks and supply concerns.

Middle East tensions drive price rebound

Gas prices moved higher as tensions increased across key energy-producing regions in the Middle East.

Recent reports point to strikes on important infrastructure linked to Iran and Qatar, including activity near Ras Laffan Industrial City. This site is important because it supports the world’s largest LNG export operations.

There have also been developments regarding Iran’s South Pars gas field, one of the world’s largest gas reserves. On top of that, shipping through the Strait of Hormuz has been disrupted, affecting vessel traffic.

The Middle East is a major supplier of LNG, so any disruption to production or shipping can tighten supply and push prices higher.

Storage data adds to the price move

Alongside geopolitical risks, recent US inventory data has also influenced the market.

The US Energy Information Administration reported a storage withdrawal of 38 billion cubic feet in the latest week. This was below expectations of around 42 billion cubic feet.

Even though the draw was smaller than expected, prices still moved higher as supply concerns remained in focus.

Storage levels are relatively comfortable, and US production continues to run near record levels.

Flow-on impact for ASX energy stocks

Rising natural gas prices can affect Australian energy companies, particularly those exposed to electricity generation and wholesale energy markets.

Origin Energy Ltd (ASX: ORG) shares are currently trading around $11.81, giving the company a market capitalisation of approximately $20.35 billion. Origin has direct exposure to gas through its generation portfolio and LNG-linked operations.

On the other hand, AGL Energy Ltd (ASX: AGL) shares are trading near $9.27, with a market capitalisation of about $6.24 billion. AGL remains one of Australia’s largest electricity generators and retailers, with gas playing a key role in its energy mix.

A market driven by risk and volatility

Despite the recent move, natural gas prices remain extremely volatile.

On a monthly basis, natural gas is still up around 8.5%, but it remains down roughly 18.5% over the past year. This highlights ongoing swings in supply, demand, and global risk.

Global energy markets are also adjusting to shifting trade flows. Disruptions to LNG supply, combined with demand from Asia and Europe, continue to influence pricing.

Investors should keep a close eye on global developments and gas price movements.

The post Natural gas jumps 6% overnight. Which ASX gas giants stand to benefit? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.