Texan natural gas prices fall again. Here’s why
The price of natural gas in west Texas has been on the downswing following lower demand for the fuel, and recent developments are keeping prices down.
West Texas has been contending with plunging natural gas prices due to an oversupply of the fuel coupled with lower demand.
The value of gas at the Waha Hub went down even further following a shutdown of part of a pipeline system due to a fire that burnt for most of the day before it was extinguished. This development poses a threat of trapping gas in the area.
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Pipeline operator Kinder Morgan said on Friday a fire that erupted on a West Texas natural gas pipeline it operates was extinguished after burning for most of the day.https://t.co/JcyPIavMuS
— Pipeline & Gas Journal (@PipelineandGas) April 28, 2024
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Prices of gas have been depressed for weeks
Gas prices have been trading at negative levels in the top U.S. shale basin in the past few weeks.
The low prices indicate that there is an excess of gas trapped in the region due to weak demand, limitations of pipelines, or both. A glut in supply forces producers to slow down their output, or pay someone else to take their stores.
The fuel’s prices have also been driven down due to an abundance of hydro and other renewable power sources.
The cost of gas in the Permian Basin has been additionally influenced by maintenance activities on pipelines, which usually occur during the spring and fall when there is minimal demand for gas for heating and cooling.
Pipeline operator Kinder Morgan has been engaged in maintenance operations on its El Paso Natural Gas pipeline system for a while now.
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