They can’t give it away: Texas natural gas at all-time negative lows

(Reuters) by Scott DiSavino – Next-day natural gas prices for Wednesday at the Waha hub in West Texas plunged to record negative levels – meaning some drillers are paying those with spare pipeline capacity to take the unwanted gas and are getting nothing for it. The drop in prices has been caused by weak demand and recent equipment problems on a key pipeline in New Mexico, analysts said. But pipeline constraints in the Permian basin in West Texas have squeezed gas prices there for some time. The Permian is the nation’s largest oil field, but it also produces large volumes of gas, and the region lacks pipelines to move it. Spot prices at the Waha hub fell to minus $3.38 per million British thermal units for Wednesday from minus 2 cents for Tuesday, according to Intercontinental Exchange (ICE) data. That beat the prior all-time next-day low of minus $1.99 for March 29. Prices have been negative in the real-time or next-day market since March 22. The fall in prices started after El Paso Natural Gas Pipeline declared force majeure on March 18 because of equipment problems at two compressor stations in New Mexico, which cut the amount of gas that… continue reading

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