[[{“value”:”
In an unexpected turn of events, U.S. spot natural gas prices in Texas dropped below zero on Tuesday despite soaring demand driven by a severe heat wave. This phenomenon, typically seen in the low-demand seasons of spring and autumn, was primarily caused by pipeline maintenance that stranded gas in the Permian Basin. Kinder Morgan’s Permian Highway gas pipeline, operating at reduced capacity due to necessary repairs, contributed to this price plunge.
The Permian Basin, a significant oil-producing region, also produces substantial gas volumes. When oil prices are high, producers tolerate losses on gas sales due to lucrative oil profits. Energy players are left with few good options when there is too much gas in a specific region. They can reduce crude oil production and as a consequence, reduce natural gas production. They can flare the associated gas if they can get a permit to do so. Their last option is to pay someone to take the gas off their hands that they cannot transport away.
The latter is what we are seeing, and as a result, next-day gas prices at the Waha hub fell to negative $1 per million British thermal units on June 24, marking the 18th occurrence of negative pricing at Waha this year.
Despite these challenges, the Permian Highway is expected to resume full service soon, potentially stabilizing prices. However, this incident highlights the delicate balance of supply and demand in energy markets and the impact of infrastructure maintenance on pricing dynamics.
The Kinder Morgan Permian Highway pipeline expansion, which added 550 million cubic feet of capacity to the pipeline, was placed into service in December, and is expected to return to full capacity by June 27.
Take the Survey at https://survey.energynewsbeat.com/
Crude Oil, LNG, Jet Fuel price quote
ENB Top News
ENB
Energy Dashboard
ENB Podcast
ENB Substack
The post Texas Natural Gas Prices Turn Negative Even Amid Heat Wave appeared first on Energy News Beat.
“}]]