Newsletter April 28, 2026

MARKET PULSE
Oil’s New Risk Premium Is a Reminder of Why U.S. Barrels Matter

The natural gas story is becoming more durable than a simple price cycle. On one side, LNG continues to pull more U.S. gas into global markets as export capacity expands and long-term contracts lock in demand. On the other, domestic electricity demand is rising as data centers and AI infrastructure add new load to the grid. Together, those trends are reinforcing the view that U.S. gas is becoming more strategically important over the next several years, not just more volatile in the next several months.

The EIA’s latest outlook points to a market that is growing, but not carelessly. In its April 2026 Short-Term Energy Outlook, EIA forecasts U.S. dry natural gas production averaging 109.6 Bcf/d in 2026 and 112.6 Bcf/d in 2027. At the same time, it expects full-year U.S. LNG exports to average 17.0 Bcf/d in 2026 and 18.6 Bcf/d in 2027, with current peak export capacity at 18.3 Bcf/d and additional capacity coming online from projects including Corpus Christi Stage 3 and Golden Pass. EIA also noted that U.S. LNG export facilities were already running near peak rates in March at almost 18 Bcf/d.

That matters because it shifts the conversation from “Can gas demand improve?” to “How much of future production growth is already being spoken for?” LNG is no longer just a hopeful long-term narrative. It is increasingly visible in the form of active capacity additions, stronger utilization, and contract-backed demand. EIA said U.S. net natural gas exports are expected to grow nearly 30% by 2027 as LNG facilities ramp up, which helps explain why storage is expected to tighten somewhat into 2027 even with production growth.

The AI side of the story is real as well, but it deserves nuance. Reuters, citing the EIA, reported that U.S. power consumption is expected to rise to new records in 2026 and 2027, with growth tied in part to AI and crypto data centers alongside broader electrification trends. That creates another layer of potential support for natural gas demand because gas-fired generation remains an important part of the power mix, especially when reliability matters.

At the same time, the tech industry is not standing still on efficiency. The IEA said energy use per individual AI task has fallen dramatically, with software and hardware advances reducing energy use per task by at least an order of magnitude annually in recent years. It also noted that simple text queries can use relatively little electricity, while newer applications such as video generation, reasoning, and agentic workloads can consume hundreds or thousands of times more energy per query. In other words, AI efficiency is improving fast, but overall electricity demand can still rise because usage is expanding and the workloads themselves are becoming more complex.

That is probably the most important takeaway for investors following energy markets today. The bullish case for gas does not need AI to become a straight-line power-demand explosion. Even if efficiency gains moderate part of the load growth, LNG export expansion alone is adding meaningful structural demand. If AI-related power demand remains strong on top of that, it becomes an additional tailwind rather than the entire thesis. For royalty owners and mineral investors, that kind of layered demand story is often more compelling than a short-term commodity spike because it supports the longer-duration importance of well-positioned U.S. gas supply.

BASIN FOCUS 
Appalachia is beginning to contract for demand, not wait for it

For years, the Appalachian Basin has been defined by a contradiction. It is one of the most prolific natural gas regions in the world, anchored by the Marcellus and Utica shales, yet it has often traded at a discount due to limited takeaway capacity. Production has never been the issue. Market access has.

That narrative is beginning to change.

What is shifting is not just infrastructure, but strategy. Leading operators such as EQT Corporation and Range Resources are no longer simply producing into the basin and relying on future pipeline solutions. They are actively working to secure long-term demand through transportation positioning, commercial agreements, and direct exposure to premium markets.

In April, Reuters reported that EQT and Glencore each added additional LNG offtake tied to the Commonwealth LNG project under long-term agreements, extending a broader trend of 15–20 year contracts linking U.S. gas supply to global markets. These agreements are structural, not incremental. They help connect Appalachian gas to international demand rather than leaving it fully exposed to regional constraints.

This is the shift: Appalachia is beginning to contract for demand, not wait for it.

At the same time, the demand story is expanding beyond LNG exports. Domestic power demand is rising, and the basin is increasingly positioned to participate. Reuters, citing the U.S. Energy Information Administration, recently noted that U.S. electricity consumption is expected to reach record highs in 2026 and 2027, driven in part by data centers, AI infrastructure, and broader electrification trends. That growth is beginning to translate into new gas-fired power opportunities, some of which are being developed closer to Appalachian supply.

Operators like EQT have highlighted projects tied to large-scale power generation and data infrastructure, including developments such as Shippingport and Homer City, which are designed to anchor demand directly within the region. This introduces a second outlet for Appalachian gas, one that does not rely on long-haul takeaway to the Gulf Coast.

LNG pulls demand from abroad. Power demand builds it at home. Appalachia is positioned for both. This dual-demand framework matters because it changes how the basin fits into the broader U.S. gas system. Historically, Appalachia has been viewed as a supply-heavy basin dependent on pipeline expansion to unlock value. Today, it is increasingly becoming a basin with multiple demand pathways:

• Gulf Coast LNG exports linked through long-term contracts

• Regional power generation tied to rising electricity demand

• Industrial and infrastructure-driven load growth

That diversification does not eliminate constraints. Pipeline limitations still exist, and basis volatility has not disappeared. But the direction of change is important. When supply can move toward more than one demand center, the system becomes more flexible—and less dependent on any single bottleneck.

From an investor perspective, that is a meaningful evolution. Basins that rely on a single outlet are inherently more exposed to pricing pressure and dislocations. Basins with diversified demand, especially when part of that demand is contract-backed and long-duration, tend to offer a more stable foundation over time.

For royalty owners, the takeaway is straightforward. Long-term demand does not remove commodity risk, but it can support more consistent throughput and more durable cash flow. That is what makes the current shift in Appalachia notable. The basin’s scale has always been its defining advantage. What is changing is how that scale is being monetized through better market access, stronger commercial alignment, and increasing participation in both global and domestic demand growth.

Appalachia is not fully unconstrained, and it likely never will be. But it may no longer need to be.

ROYALTY SPOTLIGHT
How LNG contracts translate into royalty cash flow

LNG headlines tend to focus on exports, pricing, and global demand. What they rarely show is how those contracts work their way back upstream into the cash flow of royalty owners. The connection is more direct than it might appear.

When LNG facilities are built along the Gulf Coast, they are not designed to operate opportunistically. They are built to run consistently, often supported by long-term agreements that extend 15–20 years. These contracts are structured to secure feed gas supply, not just capture short-term price advantages. That creates a steady pull on U.S. natural gas. And that pull has to be met by production. This is where the royalty model intersects with infrastructure.

LNG export facilities require a continuous stream of gas. That demand flows through pipelines, into producing basins, and ultimately back to the wells that supply it. For operators, this supports sustained activity and production. For royalty owners, it shows up as something more tangible, consistent volumes! Contracts don’t pay royalties. Production does. But contracts help keep production moving. That distinction matters.

Commodity prices can, and will, move. But when underlying demand is supported by infrastructure and long-term agreements, production is more likely to remain connected to active markets. Wells are less dependent on short-term price signals and more aligned with ongoing throughput requirements.

This is particularly relevant in gas-focused regions like the Appalachian Basin and Haynesville, where supply is increasingly tied to LNG and power demand growth. The result is not immunity from volatility, but a different profile of exposure. Instead of relying on peak pricing to drive returns, royalty owners benefit from sustained production feeding into durable demand channels.

Over time, that consistency can matter more than any single price cycle. As LNG capacity expands and contracts continue to anchor supply, the upstream impact becomes clearer. The more demand is structured, the more production stays connected. And the more production stays connected, the more consistent royalty cash flow can become.

INVESTOR ADVANTAGE 
Demand, not price, is what builds durable returns

Energy markets are often framed through the lens of price. Oil moves, gas spikes, and the conversation quickly turns to where commodities are headed next. But for long-term investors particularly in mineral and royalty assets, price is only part of the story.

What matters just as much is whether demand is durable. That is where today’s natural gas market looks different. LNG exports are no longer a future concept, they are being built, contracted, and expanded in real time, often through agreements that extend 15–20 years. At the same time, domestic electricity demand is rising, with the U.S. Energy Information Administration projecting record consumption in 2026 and 2027 as data centers, AI infrastructure, and broader electrification continue to scale. Global and domestic demand drivers are developing at the same time. That is what creates a more durable foundation.

Prices will always move. But infrastructure-backed demand whether it is LNG export facilities or gas-fired power tends to support consistent throughput. These assets are designed to run, and when they are tied to long-term contracts, they create a baseline level of demand that is less dependent on short-term market swings.

For royalty owners, that dynamic is straightforward. You don’t need peak prices. You need sustained production. When wells continue to produce into active, diversified demand channels, cash flow can remain more consistent over time even if pricing moves within a range. That does not remove risk, but it can reduce reliance on timing the market.

It also reinforces why basin positioning matters. Regions like the Appalachian Basin are increasingly connected to both LNG export markets and growing domestic power demand. More pathways to end users means production is less dependent on any single outlet—and better positioned to stay connected to demand. And over time, consistency is what compounds.

For investors, the takeaway is simple. The opportunity in energy is not just about predicting the next price move. It is about owning assets that are aligned with long-term, structural demand.

That is the lens we apply at PetroPeak. We focus on building a diversified portfolio of mineral and royalty interests positioned in basins and operated by companies that are directly connected to these evolving demand trends where infrastructure, contracts, and market access work together to support long-term value.

LOOKING AHEAD 
From short-term noise to long-term positioning

Energy markets will keep moving. Prices will respond to weather, storage, and geopolitics. That noise isn’t going away. What is changing is the foundation underneath it.

LNG export capacity is expanding along the Gulf Coast, backed by long-term contracts that extend well into the next decade. At the same time, domestic electricity demand is rising as data centers, AI infrastructure, and electrification scale. These are not short-term catalysts. They are infrastructure-driven, multi-year demand trends that are already being built into the system. This is a shift from cyclical demand to structured demand.

As that shift takes hold, the key question is no longer whether demand will be there, it’s where supply is best positioned to meet it. Basins connected to both global LNG markets and domestic power demand, supported by strong operators and improving infrastructure, are set up to capture that growth. As outlined this week, the Appalachian Basin is increasingly aligned with that reality, with multiple pathways to demand and growing exposure to long-term, contract-backed markets.

The path won’t be linear. Infrastructure timing, operator activity, and commodity prices will still create volatility. But the direction is clear. Demand is building. Infrastructure is catching up. Supply is repositioning.

For investors, that changes the focus. This is not a market that rewards timing alone. It rewards positioning by owning assets connected to long-term demand, not just short-term price moves.

That is the strategy at PetroPeak. We are focused on building a diversified portfolio of mineral and royalty interests in basins and with operators that are directly aligned with these structural trends where access to demand, infrastructure, and execution support more durable performance over time.

If you’re looking to position capital alongside these trends, we’d welcome the conversation. Visit petropeakinvest.com to learn more or connect with us directly.

Other Ways to Connect with Us:
Email: [email protected] 
Website: www.petropeakinvest.com
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Whether you’re exploring royalties for the first time or looking to deepen your exposure, PetroPeak can guide you through every step from understanding the asset class to participating in high-quality, cash-flowing deals.

Because at PetroPeak, it’s about more than just investing. It’s about building long-term income you can count on.

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