By Ryan Dezember

Forecasts for milder weather and uncertainty about AI power demand have traders dumping natural-gas futures.

Near-term futures took the biggest hit, with contracts for February delivery dropping as much as 9%. But the sell-off has stretched to futures that won't deliver gas until 2027, a sign that it's not just the near-term weather forecast that has traders worried about demand for the heating and power-generation fuel.

The revelation that Chinese artificial-intelligence upstart DeepSeek has trained high-performing AI models far more efficiently than U.S. rivals' has rocked markets.

Investors are dumping shares of chipmakers, such as Nvidia and Broadcom, as well as those independent power producers, who were expected to thrive supplying electricity to power-hungry AI data centers, have tumbled,

Natural-gas producers, such as EQT and Coterra Energy, and pipeline operators, including Kinder Morgan and Williams Cos., were also hit by the sell off.

In many Wall Street forecasts, data centers account for the bulk of natural-gas demand growth in coming years.

"The DeepSeek model is more energy and capital efficient which calls into question the significant electric demand projections for the U.S.," Jefferies analysts wrote in a note to clients.

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(END) Dow Jones Newswires

January 27, 2025 11:58 ET (16:58 GMT)

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