Permian Basin benchmark Waha cash prices, mired in a protracted slump amid limited natural gas takeaway capacity and a supply glut, may see the summer come and go without relief. But a massive new pipeline is slated to enter service this fall, promising to free up an abundance of associated gas and ease pricing pressure.
Waha traded in negative territory through most of the spring and summer, with producers forced to pay to have excess supply taken away and often stored underground. The hub on Tuesday averaged negative 69.0 cents/MMBtu, down 2.0 cents on the day, according to NGI data.
Permian supplies are driven by associated gas produced alongside oil. Crude production in the prolific basin reached record levels this year amid global demand strength and slower activity among Saudi Arabia-led OPEC and allied oil-rich countries. Overall U.S. petroleum output hit all-time highs above 13 million b/d multiple times, according to the latest U.S. Energy Information Administration (EIA) data. Nearly half of that supply came from the Permian. That remains the case in August.
