Economic uncertainty and oversupplied markets have added some volatility to the global oil outlook. Meanwhile, the often-overlooked younger sibling of oil — natural gas — is benefiting from tailwinds like growing electricity demand.

New analysis out Thursday from S&P Global Commodity Insights shows that trailing U.S. natural gas companies are catching up to oil companies in their valuations.

Demand for U.S. natural gas, which heats our homes and generates electricity, is at a record high.

“The market right now is pretty remarkable,” said Richard Meyer, vice president of energy markets, analysis and standards with the American Gas Association.

One reason? Liquefied natural gas. “Which we are shipping overseas to different markets, and certainly our allies in Europe,” Meyer said.

Growing electricity demand to power data centers is also shaping natural gas markets. 

And Matt Zaragoza-Watkins, an economist at the University of California, Davis Graduate School of Management, said sometimes those data centers are being intentionally built in places where there’s already abundant natural gas available. 

“That's going to give producers a steady and growing source of demand, and it's going to give those data center operators reliable and low-cost source of natural gas,” he said.

Take the growing data center hub in Northern Appalachia, which sits on top of the Marcellus Shale, a major natural gas producing region in the world, said Seth Blumsack at Penn State.

“So we are basically sitting on just a gold mine of … pretty easily accessible, fairly low-cost fuel for power plants,” he said.

And that takes pressure off of producers in the Marcellus to find transportation that can take natural gas away from the shale play to end consumers, said Sven Del Pozzo with S&P Global Commodity Insights.

“If you can't get all your Pennsylvania gas to where it needs to go, where people want it, then the price goes down,” he said.

But the new local data center demand changes the calculation.

“So maybe you don't have to build huge pipeline to get it from where it's produced to where people want it. So there'll be more on-site use of the commodity,” Del Pozzo said.

If data centers provide a consistent source of base demand, he said, that lowers volatility and could make natural gas more attractive to investors.