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US LNG producers soar after EU agrees $750 billion energy purchase

Energy companies in the United States saw gains in premarket trading after European Union committed $750 billion in strategic purchases in a trade agreement.

The framework deal that ended months of uncertainty on both sides of Atlantic calls for strategic oil, gas and nuclear fuel purchases during the term of U.S. president Donald Trump.

NextDecade Venture Global and Cheniere Energy all saw their shares rise between 5%-7%. The deal is expected to boost the prospects of American LNG exporters, as they expand in order to meet the growing demand for cleaner burning fuels.

Energy Fuels, a miner of uranium, rose 4% to $10.42.

As global prices rose, the demand for LNG exports increased, partly due to disruptions in supply and sanctions related to Russia's invasion of Ukraine in 2022.

The price of oil also increased by over 1.5%.

The agreement imposes an import tariff of 15% on most EU products, which is a smaller blow than the markets expected.

Ashley Kelty is an analyst with Panmure Liberum. She said, "Terms of EU-U.S. Trade Deal were in the forefront. The 15% tariff level was better than expected (30% had been mooted earlier)."

This should reduce the drag on industrial activity in both countries.

Kelty did note that the deal may have an impact on gas prices.

Kelty, a Kelty Energy analyst, said that the EU's desire to purchase more U.S. gas will lead to more U.S. imports of LNG in the future. This could signal a glut.

Before the bell, shares of U.S. producers of natural gas Expand Energy and EQT Corp rose by 1.6% and 2% respectively.

(source: Reuters)