Texas Waha natgas prices drop to negative on weak demand
Tuesday, 20 October 2020
TEXAS, Oct 19 (Reuters): Spot natural gas prices at the Waha hub in the Permian basin in West Texas turned negative for the first time since April as mild weather cut demand for the fuel.
Longer term, however, Waha forwards were trading at their highest levels in years on expectations gas supplies from oil drilling in shale basins like the Permian will drop after low crude prices this year due to coronavirus demand destruction caused energy firms to cut rigs.
Next-day prices at Waha NG-WAH-WTX-SNL dropped to an average of minus 32 cents per million British thermal units (mmBtu) for Monday, their lowest since falling to -$3.67 in April, according to pricing data from Refinitiv.
Waha forwards, meanwhile, averaged $1.90 per mmBtu for the balance of 2020 and $2.84 for calendar 2021, which would be the highest in a year since 2014 when prices averaged $4.30.
That compares with an average of 94 cents per mmBtu so far in 2020, 91 cents in 2019, and a five-year average (2015-2019) of $2.11.