Reuters reports that next-day natural gas prices for yesterday at the Waha hub in the Permian basin tumbled 60% to their lowest on record due to pipeline constraints limiting the amount of gas that can move out of the region.
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Prices for Thursday at the Waha hub fell almost a dollar to 66 cents per million British thermal units (mmBtu), according to SNL data going back to 1991, reports Reuters.
That compares with an average of US$2.25/mmBtu so far this year, US$2.71 in 2017 and a five year (2013 - 2017) average of US$3.11.
The Permian is the biggest US oil producing shale basin and since much of that oil comes out of the ground with associated gas, it is also the nation’s second biggest shale gas producing region, behind the Appalachian.
As the number of rigs seeking oil in the Permian rose this year to the highest since 2015, the amount of oil and associated gas produced has increased to record highs, constraining the region’s existing gas and oil pipes.
Those gas constraints have boosted the discount Waha trades at below the Henry Hub benchmark in Louisiana.
That spread rose to US$2.45/mmBtu yesterday, its widest since November 2008, according to SNL data available on Reuters.
Read the article online at: https://www.worldpipelines.com/business-news/21092018/texas-waha-natural-gas-prices-fall-60/