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華爾街日報Energy Paradox For 2026: Why New Year Could Be Bear Market For Oil But Bull Market For Gas
As 2026 dawns, the energy sector is fracturing into two distinct realities. While oil markets face a daunting “wall of supply” that threatens to depress prices, natural gas is entering a “new growth cycle,” fueled by the power demands of artificial intelligence (AI) and a fragile U.S. power grid desperate for reliability.
Oil Glut: ‘Worse Before It Gets Better’
According to a 2026 outlook from Morgan Stanley, the divergence is stark. The firm predicts the oil market surplus will “get worse before it gets better,” potentially peaking near 3 million barrels per day in the first half of 2026.
Conversely, U.S. natural gas demand is projected to rise 22% by 2030, driven by LNG exports and the electrification of the economy.
For oil investors, 2026 looks like a test of patience. Morgan Stanley strategists forecast that non-OPEC supply growth (estimated at 1.2 million barrels per day) will outpace global demand growth (0.8 million barrels per day), creating a “large surplus” that will weigh heavily on crude prices in the first half of the year.
“The market needs to get through a soft 1H26 first,” analysts noted, adding that while the supply-demand picture may improve in 2027, the immediate future requires a “defensive positioning bias.”
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Gas Bull: Powering The AI Revolution
While oil floods the market, natural gas is becoming the “dispatchable workhorse” of the AI era. TD Cowen highlights that demand from AI data centers, electric vehicles, and autonomous technologies is surging and could consume up to 9% of U.S. electricity by 2035.
This demand shock is colliding with an infrastructure bottleneck. TD Cowen notes that over 70% of U.S. transmission lines are more than 25 years old.
With renewables struggling with intermittency and nuclear facing deployment delays, natural gas is viewed as the “only generation technology capable of meeting this near-term demand” for reliable baseload power.
J.P. Morgan corroborates the scale of this tech-driven demand, forecasting that cloud data center capex will exit 2025 at +65% growth and track to +50% in 2026, signaling a massive, sustained pull on power resources.
Valuation Gap
This fundamental divergence has created a valuation opportunity. Morgan Stanley points out that while oil E&Ps (Exploration and Production) are pricing in a long-run WTI price of ~$59 (leaving limited upside), gas E&Ps are pricing in ~$3.77—roughly 8% below the 2026 strip.
Morgan Stanley retains a clear “preference for gas over oil,” highlighting companies like EQT Corp. (NYSE:EQT) and Antero Resources Corp. (NYSE:AR) as top picks to play the paradox.
ETFs To Watch For The 2026 Energy Divergence
| Energy Sector ETFs | Key Theme & Rationale | YTD Performance | One Year Performance |
| First Trust Natural Gas ETF (NYSE:FCG) | Heavyweight in integrated majors; offers balance sheet strength against oil surplus risks. | -6.97% | -4.11% |
| State Street Energy Select Sector SPDR ETF (NYSE:XLE) | Heavy weight in integrated majors; offers balance sheet strength against oil surplus risks. | 2.98% | 5.53% |
| First Trust NASDAQ Clean Edge Smart Grid (NASDAQ:GRID) | Investing in grid upgrades and meters needed to power AI infrastructure. | 29.48% | 28.98% |
| Global X Uranium ETF (NYSE:URA) | Exposure to uranium miners; aligns with the push for reliable, 24/7 carbon-free power. | 62.72% | 70.48% |
| Alerian MLP ETF (NYSE:AMLP) | Focuses on pipelines; the critical “toll roads” for moving gas to export terminals. | -3.57% | -2.15% |
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Maksim Safaniuk On Shutterstock.com