Natural Gas Surges: Why Enbridge Is in the Thick of the Energy Boom

The natural gas market is heating up in early 2026, and it’s creating a fascinating disconnect in the stock market. While energy prices climb, certain infrastructure plays have lagged—but that disconnect is exactly where savvy investors should be looking. Enbridge (ENB), a Canadian-based energy infrastructure giant, represents one of those rare moments when a high-yielding asset trades at a discount despite fundamental tailwinds. Currently offering a 5.9% dividend yield, ENB has delivered a 44% total return since March 2023, yet its share price continues to underperform relative to the underlying opportunity. For investors seeking exposure to structural energy trends, this is precisely where to be “in the thick of it all”—positioned at the epicenter of North American energy flows during a transformative period.

The Energy Infrastructure Advantage: A 5.9%-Yielding Play Built for Scale

Enbridge operates one of North America’s most critical infrastructure networks: the Mainline system and an extensive pipeline portfolio that moves 20% of all natural gas consumed in the US and 30% of North American crude-oil production. Think of it as a “tollbooth” for energy—the company collects fees on every barrel and cubic foot flowing through its pipes, independent of price movements. This revenue model insulates Enbridge from volatility while ensuring it benefits from absolute demand growth.

The company has recently announced its 31st consecutive annual dividend increase, a track record that speaks to both business resilience and management confidence. What’s particularly compelling now is that share price momentum is just beginning to catch up with dividend growth—the classic pattern of undervaluation giving way to recognition. This presents an ideal entry point for income-focused investors seeking both yield and capital appreciation potential.

AI-Driven Demand and LNG Growth: The New Energy Equation

Energy demand is shifting dramatically, and the drivers are far different from historical patterns. According to the Energy Information Administration (EIA), natural gas prices are expected to remain relatively flat through 2026 following recent declines. However, the forecast for 2027 tells a more compelling story: prices are projected to jump 33% as demand accelerates from multiple sources.

The largest wildcard? Data centers and artificial intelligence infrastructure. These facilities are consuming extraordinary amounts of electricity, and that trend is only accelerating. The EIA projects that by the mid-2040s, computing power consumption could exceed the total energy use for all other business applications combined. This demand is being driven by companies like Microsoft (MSFT), Alphabet (GOOGL), Amazon.com (AMZN), and Meta Platforms (META)—all racing to build out AI capability.

Enbridge recognizes this structural shift and has positioned itself accordingly. The company currently operates over seven gigawatts of renewable energy projects globally, either operational or under construction. These assets supply major tech and communications firms, ensuring that Enbridge benefits regardless of whether the energy policy pendulum swings toward renewables or conventional fuels. Smart energy companies, after all, think in decades, not quarters. Enbridge is doing exactly that—hedging between traditional and renewable infrastructure to capture growth across scenarios.

Additionally, Enbridge is expanding its Mainline system to accommodate increased crude volumes from Canadian oil sands. Phase 1 will add 150,000 barrels per day of capacity starting in 2027, with Phase 2 adding another 250,000 barrels by 2030. These expansions position Enbridge directly in the middle of major energy flows during a period of rising demand and infrastructure investment.

Oil Markets and the Venezuelan Wildcard: Separating Noise from Signal

One concern that periodically resurfaces: Could Venezuelan crude undercut Canadian oil, threatening Enbridge’s Mainline volumes? The short answer is no, and understanding why reveals why ENB is in the thick of genuine opportunity rather than temporary hype.

Venezuela does produce a similar heavy crude to Canadian oil sands, which theoretically could compete. However, Venezuela’s petroleum infrastructure has deteriorated severely over decades. The nation’s production capacity remains severely compromised, with recovery prospects measured in years at best. Meanwhile, US refineries have built deep relationships with Canadian suppliers stretching back to the 1950s—relationships backed by predictable supply, proven quality, and regulatory stability.

The geopolitical headlines about Venezuela’s political transitions may have spooked some investors in early January, momentarily creating pressure on Enbridge shares. But this provides a classic example of market noise masking fundamental value. Canadian crude remains the reliable choice for US refiners, and Enbridge remains the critical middleman in that relationship. Any concerns about Venezuelan displacement are overblown relative to the structural realities of North American energy trade.

Rising Dividends Plus Currency Advantage: A Double Tailwind

The final element making Enbridge attractive centers on its dividend structure and currency dynamics. ENB pays dividends in Canadian dollars, which creates a built-in advantage for US investors as the US dollar weakens—precisely the environment expected in 2026 as interest rates decline and the Federal Reserve adopts a more accommodative stance.

With the USD likely to soften further, dividend payments that are denominated in Canadian currency will translate into increasingly attractive dollar amounts upon conversion. Combined with the 31-year streak of consecutive dividend increases, Enbridge offers both a reliable income stream and an unforeseen currency kicker that amplifies returns.

The chart comparing ENB’s share price (which has lagged) against its dividend growth (which has climbed steadily) demonstrates classic undervaluation. The stock is beginning to close the gap, suggesting that market recognition is starting to build. For investors seeking exposure to energy infrastructure at a reasonable valuation with the potential for both dividend growth and capital appreciation, Enbridge currently offers exactly that combination—thriving fundamentally while trading at a discount to its opportunity set.