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Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

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Texas Natural Gas Prices Go Negative

  • Gas prices in the Waha part of the Permian basin fell to 20 cents per MMBtu on Monday.
  • On Tuesday morning, Waha hub gas prices dipped into negative territory.
  • Waha hub pricing faces pressure from the unfortunate combination of unseasonably warm weather, flourishing production, and takeaway capacity constraints.
Flaring

Yesterday, Waha natural gas sank to near zero levels. On Tuesday, they sank below it.

On Monday, natural gas in the Waha part of the Permian Basin fell to 20 cents per MMBtu, traders said. But on Tuesday, they fell even further, with traders reporting that offers for the Waha grade sank to -$2 per MMBtu, compared to the Nymex X22, which was trading at $5.305 per MMBTU.

Europe’s natural gas pricing is falling now that most countries have reached their desired storage levels but are still more than $25 per MMBTU. France’s President Emmanuel Macron last week lashed out at the United States over this “double standard” for its energy policies that have resulted in such disparate natural gas pricing that has the U.S. enjoying cheap domestic gas while selling it to European allies at exponential rates. France’s imports of US LNG have increased 421% during the first eight months of the year.

The Texas natural gas known as Waha is the key natural gas pricing point for Mexico—and it has faced pricing pressure from the unfortunate combination of unseasonably warm weather, flourishing production, and takeaway capacity constraints, partly stemming from a rash of pipeline maintenance.

Kinder Morgan is conducting maintenance at its Gulf Coast Express Pipeline beginning on October 25 at its Rankin, Devils River, and Big Wells Compressor Station. KMI expects the volumes to be reduced to 1,325,000 on Tuesday and Wednesday, and to 1,125,000 on Thursday and Friday. KMI’s EL Paso Natural Gas Company has been undertaking maintenance on multiple lines since the beginning of October.

Waha sinking into negative territory is not a new occurrence. Waha sank into negative territory more than a dozen times over the last three years, Bloomberg data showed on Monday.

By Julianne Geiger for Oilprice.com

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