Natural gas prices are not random. They follow a rhythm most people miss, and that rhythm is about to assert itself again. So says Brian Kessens, senior portfolio manager at Tortoise Capital.
Kessens appeared on “The Claman Countdown” to explain a market he believes is widely misunderstood. The driver, he argued, is seasonality.
Simple as that sounds, he said it is a factor many overlook. The immediate catalyst is summer heat. Hot weather means air conditioning.
A lot of that electricity comes from natural gas-fired power plants. That surge in demand pushes prices up.
Kessens did not offer specific forecasts or historical numbers. He stuck to the basic mechanics. Natural gas is not a flat-demand commodity.
It spikes with the temperature. That is the engine behind price moves that catch consumers off guard, according to Kessens. He also drew a brief comparison to crude oil.
Natural gas prices tend to show more stability than crude oil, he noted. That contrast matters for investors deciding where to put money.
Kessens named three energy companies he sees as positioned to benefit. Each sits at a different point on the value chain. Cheniere Energy is a major exporter of liquefied natural gas.
It connects domestic gas fields to overseas buyers. Targa Resources is a midstream infrastructure firm.
It moves product through pipelines and processing plants. EQT Corp is a leading natural gas producer. It pulls the stuff out of the ground.
All three, Kessens argued, are positioned to capture value if the seasonal price dynamic plays out as expected. The logic is straightforward. Demand goes up.
Prices follow. Companies along the chain collect the revenue.
The broader point Kessens made is that natural gas is not a simple commodity to understand. Its demand is driven by weather, not just by industrial consumption or economic growth. That makes it different from oil.
That also makes it predictable in a way many investors do not appreciate. Kessens did not claim the pattern holds every year.
He did not say the three companies are guaranteed winners. He laid out a framework. The framework says summer heat drives demand.
Demand drives price. Companies that produce, move, or export natural gas stand to gain. That is the core of his argument.
It is not complex. It is not revolutionary.
It is a reminder that some markets follow old, reliable patterns. Natural gas is one of them. The interview aired on a day when many Americans were already feeling the heat.
That was not a coincidence. Kessens was making a point about the present, not just the abstract future.
The summer of 2023 is here. The air conditioners are running. The natural gas plants are firing.
The seasonal cycle is in motion. Whether that cycle will produce the price moves Kessens anticipates remains to be seen. He offered no guarantees.
He offered an analysis. The analysis is grounded in the basic physics of supply and demand, modified by the calendar.
For investors, the message is clear. Pay attention to the weather. It matters more than most financial models admit.
For consumers, the message is different. The price at the pump for natural gas is not arbitrary.
It is a function of the season. And the season is hot.
