Bernstein Says U.S. Gas Supercycle Is Coming

Economic

Summary:

Bernstein analysts are forecasting the onset of a U.S. natural gas supercycle, driven by a combination of robust demand growth and constrained supply.

Bernstein analysts are forecasting the onset of a U.S. natural gas supercycle, driven by a combination of robust demand growth and constrained supply. In a detailed sector outlook, Bernstein projects that total U.S. gas demand will rise from approximately 120 billion cubic feet per day (bcfd) in 2024 to about 148 bcfd by 2030.

The key drivers of this growth are an expected surge in liquefied natural gas (LNG) exports and a sharp increase in power demand, particularly from data centers.

According to the Bernstein report, LNG exports are forecast to grow by 10 bcfd through the end of the decade, based on projects that are already sanctioned or under construction.

The analysts see this export-driven demand as “highly certain,” emphasizing that international markets will account for the vast majority, around 80%, of the demand growth over this period.

Power demand is expected to add another 8 bcfd, continuing a linear trend observed over the past two years.

This increase is attributed primarily to data center expansion, which the report characterizes as a structurally new source of demand.

Despite ongoing coal plant retirements, Bernstein assumes that renewables will largely offset the lost generation capacity, but acknowledges that natural gas could fill some of the gap depending on renewable deployment rates.

While demand is projected to climb steadily, supply growth appears more constrained.

Bernstein highlights that over 70% of U.S. gas supply does not interact with price due to either being associated with oil drilling or limited by infrastructure constraints.

In particular, production from Appalachia, the nation’s largest gas-producing region, is expected to remain flat due to pipeline limitations.

This leaves the Haynesville and Midcontinent regions as the primary sources of flexible, price-responsive supply.

Bernstein models suggest that to balance the market, these basins will need to contribute an additional 17 bcfd by 2030.

However, current activity levels, particularly in the Haynesville, are below the necessary pace, raising concerns about the industry’s ability to respond.

The supply-demand mismatch leads Bernstein to forecast a sustained rise in gas prices.

Their model indicates a long-term equilibrium price around $5 per million cubic feet (mcf), above recent spot and forward prices.

Under more bullish assumptions, such as a shortfall in Haynesville growth, prices could exceed $8 or even $10/mcf, triggering both demand destruction and increased incentive for supply expansion.

Bernstein’s assessment calls this environment a “supercycle,” driven not by speculative hype but by underlying structural trends.

They stress that global dynamics, including rising LNG demand for power and transport in Asia, will ensure that U.S. exports continue to run at or near capacity, further tightening the domestic market.

In this context, Bernstein recommends increased exposure to gas-weighted equities, naming EQT (ST:EQTAB) as their top investment idea to capture long-term value from this structural shift.

Source: Investing

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Thomas

Economic

In a call on Friday, Chinese President Xi Jinping and German Chancellor Friedrich Merz emphasized the significance of their countries’ relationship, as China and Europe navigate the uncertainties brought about by U.S. tariff policies.

China and Europe are among the largest trading partners of the U.S. and maintain substantial trading connections with each other. Last year, the trade volume between China and Germany alone was around 246 billion euros ($279 billion), based on official data.

Germany has been striving to maintain a delicate balance in its relationship with China, which Berlin views as both a strategic competitor and a crucial trading partner. The vast Chinese market has been a significant support for Germany’s export-oriented economy.

During the call, President Xi acknowledged the world is experiencing changes unseen in a century, marked by "intertwined turmoil and transformation," as reported by official broadcaster CCTV. "China is willing to work with Germany to open a new chapter in their all-round strategic partnership, to lead China-EU relations toward new development, and to contribute to the stable growth of the global economy," President Xi was cited as saying.

A spokesperson for Chancellor Merz stated that both leaders expressed their readiness to cooperate in addressing global challenges. The Chancellor underscored the importance of fair competition and reciprocity, the spokesperson added.

Source: Investing

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Damon

Economic

For intellectuals of a certain bent, no game is more absorbing than discovering the “real” power behind the throne. Who is pulling the strings? What class interests does the regime serve? Who is “really” in charge? Such questions inspire learned disquisitions as well as conspiracy theories.

So far, the favorite target when it comes to the Trump administration is the tech industry. Ian Bremmer, the head of the Eurasia Group, a political consultancy, talks about the “technipolar moment” and the “frightening fusion of tech power and state power.” Steve Bannon, Trump’s former adviser, laments the influence of “technofuedal globalists bent on turning Americans into digital serfs.” The opening session of an Aspen Institute Italia conference on the future of capitalism in Milan on May 16 (at which I spoke) addressed the subject of “Techno Capitalism: America’s New Gilded Age.”

The appeal of this argument is easy to see. The US tech industry exercises an extraordinary influence over the US economy: The “magnificent seven” account for roughly one-third of the value of the S&P 500. Tech bros contributed generously to both Trump’s re-election campaign and his inauguration ceremony. Elon Musk earned the reputation of “co-president” as he strolled around the Oval Office with his son on his shoulders.

But the closer we look at the “technipolar moment,” the more it turns into a mirage. Arguably, the most striking thing about the American tech industry, given its extraordinary economic dominance, is its relative lack of political influence.

It looks as if Musk has been expelled from Trump’s inner circle despite spending almost $300 million to help re-elect him. His spell in the sun was both brief and unsuccessful. DOGE (the Department of Government Efficiency) was sound and fury signifying very little. Musk’s promise to cut $2 trillion in government spending has shrunk to $150 billion and will probably shrink still further. This is not just because the courts have largely stymied Musk’s firing blitz but also because the entire project was misconceived: As Musk himself acknowledged, the only way to save serious money is to reform entitlements, which takes years of careful coalition-building. Musk failed to get Trump to rescind his tariffs despite denouncing Trump’s leading trade advisor, Peter Navarro, as “truly a moron” and “dumber than a sack of bricks.” Musk’s sojourn in democratic politics has so far cost him roughly a quarter of his net worth, as Tesla stocks have plummeted and the Tesla-owning classes have turned against him. Little wonder that he himself also just signaled his intention to retrench and retreat.

Musk’s failure over tariffs is a sign of the tech industry’s wider failure to set the economic agenda. A Bernie Sanders’ presidency could not have done more to damage the pillars of the tech industry. Trump’s addiction to tariffs is naturally bad for an industry that depends on global sourcing. Amazon briefly considered listing the cost of tariffs in price breakdowns on items it sold before Trump called CEO Jeff Bezos in a fury. But just as bad is Trump’s addiction to changing tariffs, which has made it impossible to plan ahead. Trump’s anti-immigration policies are making it harder to hire the skilled foreign workers that the tech companies rely on; indeed, recent figures suggest that the US is no longer a net importer of top AI talent.

Trump’s war on the universities, which includes withholding future grants, canceling existing ones and changing the funding formula for research bodies, threatens America’s thriving innovation system. American visitors to the Aspen conference talked of research grants being frozen, departments being cut, visiting professorships being abandoned and star academics hunting for jobs in Europe. The war could well intensify. Trump’s proposed 2026 budget would cut funding for the National Institutes of Health by about 40% and for the National Science Foundation by 57%; moreover, his proposals to tax university endowment income at 14% or 21%, or take away their tax-exempt status, would hamper attempts to use university funds to plug the gap.

The Trump presidency owes far more to populism than to tech power. Trumpian populists might cheer Musk when he talks about feeding bits of the government into the “woodchipper,” but they have not forgotten that, until only the other day, many tech bros were social liberals who donated heavily to the Democratic Party and exported American jobs abroad. Vice president JD Vance denounces Apple Inc. and Google as latter-day versions of the parasitic East India Company. Bannon goes further in his fire-and-brimstone podcast.

The tech industry had assumed that Trump’s election would mean the unwinding of Joe Biden’s anti-trust machinery. Far from it: The Federal Trade Commission is continuing its case against Meta for snuffing out nascent competition when it purchased Instagram and WhatsApp, and the Justice Department is determined to force Google to sell its Chrome web browser. Both cases were filed during Trump’s first term and carried over during Biden’s term in a sign of a growing anti-tech consensus.

To the extent that Trump has any economic policy, it is restoring manufacturing rather than boosting tech. He wants to bring manufacturing back to the US partly because it supports the sort of blue-collar workers who he thinks made America great and partly because America needs to make more things if it is to face down its Chinese rival. In general, tech executives opened their wallets to Trump not because they shared his vision of America, but because they realized that the Democrats were shuffling to defeat behind Biden and because they were terrified that Trump would turn on them.

To the extent that Trump has a “class base,” in the old Marxist phraseology, it is in family businesses rather than the tech goliaths on the West Coast. Trump’s natural milieu is with his fellow family businesspeople who inherited their companies, who work in real estate and the extractive industries, who loathe the box-ticking culture of the corporate world, and who relish flashing their wealth in places like Mar-a-Lago. These people are very different from the high-IQ nerds building the virtual world (though they are not averse to making easy money from “crypto”).

But even Trump’s identification with his fellow family business owners is limited. The most important thing to grasp about Trump is that he doesn’t represent anybody’s interests but his own. Indeed, the worrying thing about his presidency is not that sinister business forces are pulling the strings from behind the scenes. It is that the businessman who is pulling the strings (and grabbing the spoils) is Trump himself.

Source: Bloomberg Europe

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Manuel

Stocks

Political

US stocks fell on Friday to register weekly losses as investors assessed President Trump's latest tariff threats and the potential impact of his massive tax bill on the deficit and the economy.

The Dow Jones Industrial Average (^DJI) sank 0.6%. The S&P 500 (^GSPC) also fell roughly 0.7%. The tech-heavy Nasdaq Composite (^IXIC) backed off about 1%.

All three major averages fell more than 2% for the week.

The three indexes trimmed steeper losses that followed Trump's comment on Friday that Apple (AAPL) must pay a 25% tariff on iPhones sold but not made in the US. The tech giant has begun shifting some manufacturing to India, with China, home to its key suppliers, locked in a trade war with the US. Apple shares fell about 3%.

On Friday afternoon, Trump implied the tariffs would apply to other cell phone manufacturers.

"It would be more, it would be also Samsung and anybody that makes that product, otherwise it wouldn't be fair," Trump told reporters on Friday afternoon. "Again, when they build their plant here there's no tariffs. So they're going to be building plants here."

At the same time, Trump threatened to hike the tariff on EU imports to "a straight 50%" beginning June 1 as trade talks with the bloc have stalled.

The president's warnings shattered a more muted mood on Wall Street as investors wound down to the Memorial Day trading break on Monday.

His comments also created another supply chain complication for companies that are already worried about the potential hit to the economy from Trump's tariff blitz. Earnings season has seen several companies hold off from providing full annual guidance due to uncertainty around tariffs.

Stocks have suffered this week as deficit worries pushed up Treasury yields, which intensified as Trump's tax bill forged ahead. Wall Street is still weighing the economic impact of Trump's revised bill, which cleared a key hurdle in the House vote for approval.

Fears that the legislation could boost the US deficit by trillions have stoked a surge in longer-dated Treasury yields, which were already in focus after a Moody's downgrade. The 30-year yield (^TYX) eased but held above the key level of 5% on Friday after recently reaching highs not seen since the financial crisis.

Wall Street's attention has also begun to turn to Nvidia (NVDA) earnings, due Wednesday after the bell.

This year, the chip giant has found itself in the crosshairs of Trump's fast-moving trade policy as well as debates in Big Tech over costly AI investments. Nevertheless, options traders expect a lower level of volatility in Nvidia's stock after its results next week, compared with recent quarters.

Source: Yahoo Finance

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Manuel

Commodity

Political

U.S. President Donald Trump appeared to give his approval to Nippon Steel's (5401.T), opens new tab $14.9 billion bid for U.S. Steel (X.N), on Friday, saying the "planned partnership" between the two would create jobs and help the American economy.

Shares of U.S. Steel soared 21% as investors interpreted the post on Truth Social to mean Nippon Steel's takeover of U.S. Steel was nearing completion, having cleared the last major hurdle with Trump's apparent approval.

"This will be a planned partnership between United States Steel and Nippon Steel, which will create at least 70,000 jobs, and add $14 Billion Dollars to the U.S. Economy," Trump said in a post on Truth Social.

Trump added that the bulk of that investment would occur in the next 14 months and said he would hold a rally at U.S. Steel in Pittsburgh next Friday.

The two companies did not immediately respond to a request for comment. The White House did not immediately reply to questions about the announcement.

Pennsylvania Senator Dave McCormick, who also called the deal a "partnership," said it was a "huge victory for America and the U.S. Steel Corporation," that will protect more than 11,000 Pennsylvania jobs, and support the creation of at least 14,000 more.

The Committee on Foreign Investment in the U.S., which reviews deals for national security risks, told the White House earlier this week that the security risks posed by the deal can be addressed, Reuters reported, moving the final decision on the merger to Trump's desk.

Reuters had reported this week that if the merger is approved, Nippon Steel has said it would invest $14 billion into U.S. Steel's operations including up to $4 billion in a new steel mill.

Talks with the U.S. government about the merger were in the final stages, Nippon Steel's president Tadashi Imai told reporters in Tokyo earlier this week, declining to provide details but saying the company is awaiting Trump's decision.

Following an earlier CFIUS-led review, former President Joe Biden blocked the deal in January on national security grounds.

The companies sued, arguing they did not receive a fair review process. The Biden White House rejected that view.

Source: Reuters

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Manuel

Middle East Situation

Energy

Iranian and U.S. delegations wrapped up a fifth round of talks in Rome on Friday and signs of some limited progress emerged in the negotiations aimed at resolving a decades-long dispute over Tehran's nuclear ambitions.

Despite both Washington and Tehran taking a tough stance in public ahead of the talks on Iran's uranium enrichment, Iranian Foreign Minister Abbas Araqchi said there was potential for progress after Oman made several proposals during the talks.

"We have just completed one of the most professional rounds of talks ... We firmly stated Iran's position ... The fact that we are now on a reasonable path, in my view, is itself a sign of progress," Araqchi told state TV.

"The proposals and solutions will be reviewed in respective capitals ... and the next round of talks will be scheduled accordingly."

A senior U.S. official said the talks lasted more than two hours and were both direct and indirect with Omani mediators.

"The talks continue to be constructive – we made further progress, but there is still work to be done. Both sides agreed to meet again in the near future. We are grateful to our Omani partners for their continued facilitation," the official said.

The stakes are high for both sides. President Donald Trump wants to curtail Tehran's potential to produce a nuclear weapon that could trigger a regional nuclear arms race and perhaps threaten Israel. The Islamic Republic, for its part, wants to be rid of devastating sanctions on its oil-based economy.

Omani Foreign Minister Badr Albusaidi said on X the talks between Araqchi and Trump's Middle East envoy Steve Witkoff had ended "with some but not conclusive progress".

Ahead of the talks, Araqchi wrote on X: "Zero nuclear weapons = we Do have a deal. Zero enrichment = we do NOT have a deal. Time to decide."

Among remaining stumbling blocks are Tehran's refusal to ship abroad its entire stockpile of highly enriched uranium - possible raw material for nuclear bombs - or engage in discussions over its ballistic missile programme.

Diplomats have said reaching a concrete deal before the summer would technically be impossible given the complexities of an accord. In the meantime, a senior Iranian official involved in nuclear talks with the U.S. said "if Washington drops its 'zero enrichment' demand, a political agreement is feasible."

STUMBLING BLOCKS

U.S. Secretary of State Marco Rubio said on Tuesday that Washington was working to reach an accord that would allow Iran to have a civil nuclear energy programme but not enrich uranium, while acknowledging that this "will not be easy".

Iranian Supreme Leader Ayatollah Ali Khamenei, who has the last say on matters of state, rejected demands to stop refining uranium as "excessive and outrageous", warning that such talks were unlikely to yield results.

Iran says it is ready to accept some limits on enrichment, but needs watertight guarantees that Washington would not renege on a future nuclear accord.

Trump in his first term in 2018 ditched a 2015 nuclear pact between major powers and Iran. Since returning to office this year, he has restored a "maximum pressure" campaign on Tehran and reimposed sweeping U.S. sanctions that continue to hobble the Iranian economy.

Iran responded by escalating enrichment far beyond the 2015 pact's limits.

Wendy Sherman, a former U.S. undersecretary who led the U.S. negotiating team that reached the 2015 agreement, earlier said that Tehran presents enrichment as a matter of sovereignty.

"I don't think it is possible to get a deal with Iran where they literally dismantle their programme, give up their enrichment, even though that would be ideal," she told Reuters.

The cost of failure of the talks could be high. Iran's arch-foe Israel sees Iran's nuclear programme as an existential threat and says it would never allow the clerical establishment to obtain nuclear weapons. Tehran says it has no such ambitions and the purposes are purely civilian.

Israel's strategic affairs minister and the head of its foreign intelligence service, Mossad, were also due to be in Rome for talks with the U.S. negotiators, a source aware of the matter told Reuters.

Araqchi said on Thursday that Washington would bear legal responsibility if Israel attacked Iranian nuclear installations, following a CNN report that Israel might be preparing strikes.

Source: Reuters

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Manuel

Economic

Political

President Donald Trump dug in on his threat to impose a 50% tariff on the European Union and said a potential 25% charge on smartphones would apply to all foreign-made devices, in the latest escalation of a trade war that is rattling markets and confusing businesses.

Trump on Friday reiterated his complaints about the EU, accusing the bloc of slow-walking negotiations and unfairly targeting US companies with lawsuits and regulations. The president downplayed the ability of the EU to broker a lower tariff rate, which he said would hit June 1. “We’ve set the deal. It’s at 50%,” he said.

“They don’t go about it right,” Trump told reporters in the Oval Office. “I just said, it’s time that we play the game the way I know how to play the game.”

Separately, the president said that a potential 25% tariff he threatened in a social media post Friday morning against Apple Inc. smartphones would also apply to devices from Samsung Electronics Co. “and anybody that makes that product,” and that his administration was moving to impose the levy by the end of June.

“Otherwise it wouldn’t be fair,” Trump said.

Taken together, the threats — which could dramatically reshape US trade on key consumer products — delivered a fresh shock for investors.

Equities held losses after Trump said he was “not looking for a deal” with Brussels. Earlier, losses were nearly erased after US Treasury Secretary Scott Bessent said several trade deals may be struck in the coming weeks. Apple led a selloff in tech, falling more than 3%.

The president’s missives, first posted early Friday, represented a fresh round of trade brinkmanship after previously indicating he was looking to wind down talks with partners over his April 2 duties, which he paused for 90 days to allow for negotiations.

Trump’s attention this week has mostly been focused on a massive tax and spending package currently being considered by the US Congress.

Trump dismissed concerns that his moves could result in higher prices for Americans, predicting that foreign countries and companies could absorb the cost of the tariffs — or would move manufacturing to the US. Still, he acknowledged that some costs could be passed on to consumers.

“Sometimes the country will eat it. Sometimes Walmart will eat it, and sometimes it’ll be something to be paid, something extra,” Trump said.

The defiant tone came despite top administration officials saying earlier Friday that Trump was primarily seeking to drive US trading partners and international corporations to strike better deals.

“The president was getting frustrated with the EU,” Bessent said on Bloomberg Television earlier Friday. In a previous interview on Fox News, Bessent expressed hope “this would light a fire under the EU.”

The pivot was a notable change in tone from a Group of Seven finance ministers’ meeting earlier this week, where the US Treasury secretary appeared keen on improving relations with Europe, according to a person familiar with the discussions.

Separately, Trump posted to social media that he already told Apple the company’s popular smartphones should be made in the US and that he was nonplussed by its effort to partially move production from China to India. The comments came days after a meeting between the president and Apple Chief Executive Officer Tim Cook, which was disclosed by a White House official.

“I had an understanding with Tim that he wouldn’t be doing this. He said he’s going to India to build plants. I said, ‘that’s OK to go to India, but you’re not going to sell into here without tariffs.’”

Trump’s latest posturing comes after the EU earlier this week shared a revived trade proposal with the US in a bid to jump-start talks. The EU’s trade chief, Maros Sefcovic, is planning to hold a call with Jamieson Greer, his US counterpart, on Friday to take stock of negotiations, a European Commission spokesperson said before Trump’s post.

A spokesperson for the commission declined to comment on the president’s threat ahead of the discussion.

Irish Prime Minister Micheal Martin called Trump’s suggestion “enormously disappointing.”

“Tariffs are damaging to all sides,” Martin posted on X. “A negotiated outcome is the best possible result for both sides, as well as for global trade.”

Trump’s latest tariff threat would hit $321 billion worth of US-EU goods trade, lowering US gross domestic product by close to 0.6% and boosting prices by more than 0.3%, according to Bloomberg Economics calculations.

The new EU framework covers tariff and non-tariff barriers, as well as ways to enhance economic security, mutual investments, strategic purchases and cooperation on global challenges, according to people familiar with the matter who requested anonymity to discuss the terms, which are not public.

The aim of the paper, which was sent to the White House earlier this week, was to jump-start formal trade negotiations.

Others in Europe saw Trump’s threats as an attempt to gain leverage on the bloc rather than an ironclad directive.

“This is all part of the negotiation; we will look calmly at the proposals and respond robustly and firmly,” Dutch Prime Minister Dick Schoof said Friday during a weekly press conference.

But there were signals the negotiations were not proceeding well. One EU official described a prior US proposal as a wish list of unrealistic and unilateral demands, Bloomberg reported earlier. The EU is aiming to cooperate with the US, and is seeking a balanced and mutually beneficial deal. EU officials and many member states remain skeptical that the Trump administration is driven by similar goals.

US Commerce Secretary Howard Lutnick on Wednesday said at an Axios event that some trade negotiations had proved “impossible.”

“Like the European Union — it’s just very difficult because, you know, Germany would like to make a deal, but they’re not allowed,” Lutnick said.

The EU plans to move forward with preparing countermeasures if negotiations fail to produce a satisfactory outcome. The trade bloc has put together plans to hit €95 billion of US exports ($107 billion) with additional tariffs in response to Trump’s “reciprocal” levies and 25% tariffs on cars and some parts.

European nations agreed earlier this month to delay for 90 days the implementation of a separate set of retaliatory duties against the US over 25% levies Trump imposed on the bloc’s steel and aluminum exports. That move came after Trump lowered his so-called reciprocal rate on most EU exports to 10% from 20% for the same amount of time.

“We are maintaining the same line: de-escalation, but we are ready to respond,” French trade minister Laurent Saint-Martin posted Friday on X.