Investing.com - U.S. natural gas exports are set to increase significantly over the next 18 months, helping gas prices to move higher by next year, according to UBS.

At 05:55 ET (09:55 GMT), natural gas prices fell 2.6% to $3.249 per million British thermal units, or MMBtu, down over 10% over the year to date.

In its latest Short-Term Energy Outlook (STEO) report, the Energy Information Administration (EIA) estimated U.S. natural gas gross exports hit 23.9 billion cubic feet per day (bcf/d) in April - 9.4bcf/d via pipeline and 14.5bcf/d as liquefied natural gas (LNG).

The EIA’s forecast that pipeline gross exports will hit 11bcf/d at the end of 2026, and LNG exports will reach almost 18bcf/d, an increase of 5bcf/d of gross exports in April.

Two new LNG export facilities—Plaquemines LNG Phase 2 and Golden Pass LNG—are the driver of the projected LNG export increase, said analysts at UBS, in a note, dated May 19.

Plaquemines LNG Phase 2 is expected to start exports in the second half of 2025 and Golden Pass LNG at the end of 2025/beginning of 2026.

“When those facilities start operating will define how quickly the natural gas market tightens up,” said UBS. “That said, we still believe a higher price is required over the next 12 months to secure the supply growth needed to accommodate higher U.S. natural gas exports.”

UBS has increased all its forecasts, but compared to the current futures curve, their targets are relatively neutral this year.

“But next year, we expect prices to climb higher, driven by rising U.S. natural gas exports. So we continue to see value in longer-dated gas contracts, such as those ending in summer 2026,” said UBS.

“Since our last natural gas update, published on 24 April, the July 2026 US natural gas contract has increased by about USD 0.40/mmbtu to around USD 4.20/mmbtu. We expect the July contract to rise further to USD 4.50/mbtu.”